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Drought in Argentina, Putin comments create supply caution
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China recovery hopes, U.S. export inspections also support
PARIS/SINGAPORE, Jan 18 (Reuters) - Chicago soybean and corn futures held firm near multi-month peaks on Wednesday while wheat rose to a two-week high, supported by investor hopes of an economic upturn in China and supply risks in Argentina and Russia.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.4% at $15.46-1/2 a bushel by 1117 GMT, after earlier touching a fresh seven-month top.
CBOT corn added 0.3% to $6.87-1/2 a bushel after touching a new two-month peak, while CBOT wheat rose 0.9% to $7.58-1/4 a bushel.
Crude oil and other commodity markets drew strength from optimism about Chinese demand, as investors looked beyond disappointing 2022 growth and anticipated a rebound in activity with the easing of COVID-19 restrictions.
China is the world's biggest soybean importer.
Dry conditions in Argentina continue to be the main story for soybeans, commodities research firm Hightower said in a note, adding rain forecast over the coming week is expected to be "below normal".
Expectations of bumper crops in Brazil, however, continued to temper supply concerns.
Brazil's 2022/2023 summer grain production will outgrow total storage capacity for the first time in 20 years amid expectations of a record soybean harvest, according to government data obtained by Reuters from Conab, the food supply and statistics agency.
On Tuesday, weekly U.S. export inspections data reported by the U.S. Department of Agriculture (USDA) showed 774,461 tonnes of U.S. corn and 2.075 million tonnes of soybeans, both above a range of trade expectations.
The wheat market was recovering from recent losses, encouraged by remarks by Russian President Vladimir Putin that his country, the world's biggest wheat exporter, should maintain stocks and not export all its agricultural supplies.
The comments drew attention to geopolitical risks in the Black Sea export zone as Russia's invasion of Ukraine continues. (Reporting by Gus Trompiz in Paris and Matthew Chye in Singapore; Editing by Eileen Soreng and Sherry Jacob-Phillips)
