* Chicago wheat rises to highest since mid-July
* Ample supplies may limit scope for further gains (Adds quotes, updates prices)
By Nigel Hunt
LONDON, Oct 17 (Reuters) - Chicago wheat futures rose for a second session on Thursday to hit a three-month high, with short-covering by funds, cold weather in the United States and prolonged drought in Australia all helping to support the market.
Soybeans and corn prices were also higher.
The most-active wheat contract on the Chicago Board Of Trade
added 1.85% to $5.22-1/4 a bushel by 1022 GMT, after climbing to its highest since July 15 at $5.23 a bushel.
“The wheat market is well supplied but there is some short-covering and threat to supplies from U.S. weather,” said Phin Ziebell, agribusiness economist at National Australia Bank.
“We are not yet sure, what is the extent of damage from the cold weather in the United States.”
Drought in Australia for the third year in a row is also likely to continue to curtail shipments from a traditionally large exporter. In 2018/19 Australia’s wheat exports fell to 9 million tonnes, an 11-year low and dramatically less than the 22.6 million tonnes from two years earlier.
Egypt’s purchase of 405,000 tonnes of Russian, French and Ukrainian wheat on Wednesday was also supportive, particularly for prices in Europe.
December wheat on Paris-based Euronext rose 1.25 euros, or 0.7%, to 181.25 euros a tonne.
The scope for further gains, however, appeared limited.
“The global wheat market remains amply supplied this crop year which provides no argument in favour of further price rises,” Commerzbank said in a market note.
“Global stocks are set to grow to a record level at the end of 2019/20. We believe the upside potential for prices is largely exhausted.”
CBOT’s most active soybean contract was up 0.9% at $9.36-3/4 a bushel while the most active corn contract climbed 1.1% to $3.96.
Further information was awaited on the impact of recent snow on corn and soybean crops in Minnesota and North Dakota.
The U.S. Department of Agriculture said on Wednesday it will collect additional information on harvested acreage of corn and soybeans in those states and could publish changes in its Nov. 8 crop production report.
“The damage for crops was done last weekend, but it will be some time before we know the impact,” analyst Tobin Gorey of Commonwealth Bank of Australia said.
There continued to be uncertainty surrounding the potential for fresh Chinese demand for U.S. agricultural products with little business emerging so far.
U.S. President Donald Trump said last week that China had agreed to purchase $40 billion to $50 billion worth of U.S. agricultural goods in a first phase of an agreement to end a 15-month trade war. (Additional reporting by Naveen Thukral in Singapore; Editing by Rashmi Aich and David Evans)