Wheat Futures Advance on Speculation Ukraine Set to Impose Export Curbs

Wheat futures advanced for the first time in four sessions after Ukraine, the second-largest exporter in the former Soviet Union last year, said it will probably limit overseas sales, following Russia’s restrictions on trade.

December-delivery wheat added as much as 0.9 percent to $6.8975 a bushel in Chicago before trading at $6.86 a bushel at 2:30 p.m. Singapore time.

Ukraine will likely impose an export quota of 1.5 million metric tons from Sept. 1 through Dec. 31 to cool domestic prices, Agriculture Minister Mykola Prysyazhnyuk said yesterday. Drought and wildfires in the Black Sea region have destroyed crops, sparking fears of shortages. Ukraine shipped 5 million tons in the same period last year, according to researcher ProAgro.

“It will certainly affect the global supply,” Chung Yang Ker, an analyst at Phillip Futures Pte. in Singapore, said by phone today. “That’s going to move the price up.”

Ukraine shipped 1.1 million tons of wheat from July 1 through Aug. 16, Prysyazhnyuk said. The nation was forecast by the U.S. Department of Agriculture on Aug. 12 to export 6 million tons in the marketing year that began July 1, from 9.3 million tons a year earlier.

Russia, the world’s third-largest grower in the 2009-2010 season, implemented a ban on grain exports, including wheat, from Aug. 15 through Dec. 31 after the worst drought in at least 50 years slashed production.

“Our next concern is whether other countries around the Black Sea will follow such restrictions,” Ker said.

Indian Exports

Russia, Ukraine and Kazakhstan, the three biggest wheat exporters in the former Soviet Union, accounted for about 27 percent of global trade of wheat, flour and related products last year, according to Bloomberg calculations based on USDA estimates on Aug. 12.

Still, India, the world’s second-largest wheat grower, may end a three-year ban on overseas sales as global prices rise, Farm Minister Sharad Pawar said yesterday.

The South Asian nation had a wheat stockpile of 33.6 million tons on July 1, almost twice the normal buffer volume, according to data compiled by the state-run Food Corp. of India.

Lifting India’s export ban is a “bearish factor for the wheat market,” as it increases competition among exporters including the U.S., Canada and Australia, Ker wrote in a note to clients today.

Corn for December delivery dropped 0.6 percent to $4.275 a bushel, while November-delivery soybeans lost 0.8 percent to $10.34 a bushel.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net.

Aug. 18 (Bloomberg) -- Tim Morris, an analyst at Wise-Owl.com, talks about BHP Billiton Ltd.'s $39 billion unsolicited takeover offer for Potash Corp. of Saskatchewan Inc. BHP may go directly to shareholders as early as this week with the bid, said two people with direct knowledge of the matter. Potash Corp., the world’s largest fertilizer producer, rejected BHP’s $130-a-share offer yesterday, calling it "grossly inadequate." Morris, who speaks from Sydney with Bloomberg's Rishaad Salamat, also discusses the outlook for agricultural commodities. (Source: Bloomberg)