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Wheat Advances on Concern Russia, Ukraine May Impose Controls on Exports
Wheat rose on speculation that Russia and Ukraine may introduce export controls to contain domestic prices after adverse weather cut production.
Milling wheat for November delivery gained as much as 3.9 percent to 187.75 euros ($244.11) a metric ton on NYSE Liffe in Paris and was at 186 euros at 1:25 p.m. local time. September- delivery wheat climbed as much as 2.1 percent in Chicago.
Ukraine has yet to introduce milling-wheat export limits and will “look into the issue” if shipments increase, Agriculture Minister Mykola Prysyazhnyuk said today. Russian grain traders may hesitate to sign new export agreements on concern that a local drought may spur the government to curb outbound shipments, researcher SovEcon said last week.
“Analysts have raised the possibility of export restrictions in Russia and Ukraine as a result of the drought,” Paris-based farm adviser Agritel said in a market comment today. “For the moment, these rumors remain in the realm of hypothesis.”
Russia will harvest as little as 75 million tons of grain this year after record heat in the country’s center, below a July 19 outlook for no more than 81.5 million tons, the Russian Grain Union said yesterday. The wheat crop may fall to 45 million tons from 62 million in 2009, it said.
Exports From Ukraine
Adverse conditions in Russia “should prompt the USDA to clearly adjust Black Sea wheat production down in its next report,” Agritel said, referring to the U.S. Department of Agriculture.
Ukrainian grain exports may be 16 million to 16.5 million tons this season, Prysyazhnyuk said. They were 21.2 million tons in the prior period, the Ukrainian Agrarian Confederation said last week. Rain slowed grain harvesting this year, Kiev-based consultant UkrAgroConsult said this month.
Wheat rose 1.9 percent to $6.065 a bushel on the Chicago Board of Trade, paring a climb as high as $6.0725.
December-delivery corn added 1.1 percent to $3.8125 a bushel. The most-active contract touched $3.7575 on July 26, the lowest level since July 1, on speculation rain will help crop yields in the U.S., the biggest grower and exporter.
About 72 percent of the U.S. corn crop was rated good or excellent as of July 25, while 67 percent of soybeans got the top ratings, the USDA said July 26. The ratings were unchanged from a week earlier.
Rabobank Forecast
Corn will average $4.25 a bushel in the first quarter of 2011, Luke Chandler, Rabobank’s executive director of agricultural market research, said this week. Prices also may rise because U.S. supplies are cheaper for importers in China, Chandler said.
Soybeans for November delivery gained 0.5 percent to $9.7075 a bushel. Farmers in Brazil, the world’s second-biggest producer, may increase planting of the oilseed this year as prices rise and fertilizer costs drop, a farm group said.
Planting may rise in Mato Grosso and Rio Grande do Sul states for next year’s crop, which farmers will start planting in September, the National Confederation of Agriculture and Cattle said yesterday. Fertilizer prices may drop 10 to 15 percent, the group said.
To contact the reporters on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net.
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