Wheat hits two-month high on tighter supply outlook

PARIS/BEIJING, Sept 12 (Reuters): Chicago wheat futures extended gains on Thursday to a two-month high as news that Egypt bought a large amount of Russian wheat this week reinforced expectations that supplies in the Black Sea export zone are ebbing after a harvest glut.
Corn and soybean were also higher as traders adjusted positions ahead of a US Department of Agriculture (USDA) report that will include closely watched US harvest estimates.
The most active wheat contract on the Chicago Board of Trade (CBOT) was up 1.3 per cent at $5.86-1/2 a bushel by 0920 GMT after touching its highest since July 11 at $5.89.
December wheat on Euronext also extended gains to hit a one-month high at 226.00 euros ($249.01) per metric ton.
Wheat prices have risen this month as short-covering by investors has been encouraged by talk that Black Sea supply is less abundant than thought.
Doubts have been raised about the size of this year's Russian wheat crop after adverse weather and concerns about drought hampering planting in Russia and Ukraine for next year's crop.
News that Egypt's state grains buyer purchased 430,000 tons of Russian wheat in a private deal this week outside of the traditional tender process underscored brisk Russian exports.
"Russian export flows are much stronger than anticipated," said Argus analyst Maxime Devillers. "Demand is not as thin as people have said at the start of the season."
CBOT soybeans were up 0.6 per cent at $10.06 a bushel and corn added 0.9 per cent to $4.08-1/2 a bushel.