Wheat back near 22-month highs on Black Sea woes

U.S. wheat futures climbed on Wednesday, rising just over 3% and back within range of 22-month peaks as worries about output in the drought-ravaged Black Sea region resurfaced after the previous session's dip.
"Concern about whether Russia and Ukraine can really allow large exports was supportive today, coupled with Glencore's bearish outlook on the Russian crop," one European trader said.
The head of the Russian unit of commodity trader Glencore told Reuters Insider television on Tuesday that Russia's forecast of a 2010 grain crop of up to 75 mln tonnes was too optimistic in the face of a drought hitting the country and that it expected a 65 mln tonne crop.
The drought in the Black Sea region is expected to affect world wheat trade, with key exporters such as Australia and the United States gaining market share as drought-stricken countries reap smaller crops. Traders said some Black Sea shipments to Asia had already been held up.
"In view of the massive crop failures there might be a strong decline in exports and sporadic delivery failures anyway, even without an officially imposed export stop," Commerzbank said in a report. "Furthermore, it can not be excluded that such a step might be taken at a later point of time in order to curb inflation."
Chicago Board of Trade wheat was up 3.2% at $7.01-3/4 a bushel by 1122 GMT, shy of Monday's 22-month high of $7.11-1/4 and off a session high of $7.06-3/4.
The market is also keeping a close watch on Egypt which is seeking 60,000 tonnes of optional-origin wheat for September 1-10 shipment in a tender on Wednesday.
In its previous tender on Saturday, Egypt, the world's top wheat importer, made its largest international wheat purchase in a month, buying 180,000 tonnes of Russian wheat. Prices were more than $60 per tonne higher than a month ago.
Benchmark European wheat futures in Paris rose more than 2% on Wednesday, driven by export tenders and the concerns about Russia's drought.
By 1122 GMT benchmark November milling wheat on the Paris Euronext was up 1.84% at 208 euros a tonne after touching 209.75 euros per tonne in the morning.
"Prices are up on export tenders in Egypt, Tunisia, Israel and Jordan," one French trader said.
Corn and soybean markets ticked higher. CBOT September delivery corn gained 1.1% to $3.94 a bushel and August soybeans added 0.1% to $10.54 a bushel. More storms will move across the upper U.S. Midwest this week, adding moisture to soggy crop fields and causing localized flooding, while the dry southern belt will see some relief rains, a forecaster said.
"Despite the heavy showers in the western Corn Belt, crops are still in mostly good condition," said Telvent DTN forecaster Mike Palmerino, referring to weekly state crop reports issued Monday afternoon.