Wheat near 3-month high on lower U.S. output, tight world supply

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U.S. reduces production estimate as world wheat supplies tighten

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Escalating Russia-Ukraine war lends support to Chicago futures

SINGAPORE, Oct 3 (Reuters) - Chicago wheat futures kicked off the last quarter of 2022 on a bullish note on Monday, climbing 1% after a U.S. government report reduced its production estimate amid tightening global supplies.

Corn rose for a second consecutive session on forecasts of lower supplies in the United States and Europe, while soybeans climbed after declining on Friday.

"Bullish data from the USDA (U.S. Department of Agriculture) and continued escalation of Black Sea war issues helped support (the market)," according to a Hightower report.

"The market has garnered strength recently from food security concerns and worries about slow movement out of the Black Sea region."

The Chicago Board of Trade (CBOT) most-active wheat contract rose 1% to $9.30-3/4, as of 0224 GMT, not far from Friday's three-month high of $9.46 a bushel.

Corn added 1.2% to $6.85-3/4 a bushel and soybeans gained 0.4% at $13.70-1/4 a bushel.

The 2022 U.S. wheat harvest was smaller than previously forecast, the USDA said in its annual Small Grain Summary report, cutting its crop assessment to 1.650 billion bushels.

This compared with analysts' average estimate of 1.778 billion bushels in a Reuters poll, and 1.783 billion bushels in the USDA's August assessment.

The world is heading toward the tightest grain inventories in years despite the resumption of exports from Ukraine, as the shipments are too few and harvests from other major crop producers are smaller than initially expected.

Corn prices were underpinned by tighter-than-expected stocks, with the USDA pegging corn stocks at 1.377 billion bushels, down from trade expectations of 1.512 billion bushels.

U.S. corn inventory estimates came as the European Commission cut its forecast for this year's maize harvest in the region to 55.5 million tonnes from 59.3 million in late August, joining other forecasters in projecting a 15-year low for the drought-hit crop.

The 6.4% decrease marked the third sharp reduction in a row to the Commission's monthly forecast for corn harvest.

Large speculators cut their net long position in CBOT corn futures in the week ended Sept. 27, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans.

Soybeans slid on Friday after the USDA upgraded its stocks assessment to 273.76 million bushels, significantly higher than the average trade guess of 242 million bushels.

Heightening Russia-Ukraine tensions provided additional support to wheat and corn futures.

Russian President Vladimir Putin proclaimed the annexation of a swathe of Ukraine in a Kremlin ceremony on Friday after holding what Russia called referendums in occupied areas. Western governments and Kyiv said the votes breached international law and were coercive and non-representative. (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)