Wheat Gains on Signs of Strengthened Demand Following Russian Export Ban

Wheat rose for the third time in four sessions as demand builds for inventories from the U.S., the world’s largest shipper, after Russia banned foreign sales amid the worst drought in at least 50 years.

U.S. exporters sold 1.41 million metric tons of wheat in the week that ended on Aug. 12, up 4.6 percent from the prior seven days, according to the U.S. Department of Agriculture. The grain has surged 51 percent since the end of June as production declined in Russia, which tied with Canada as the second-biggest exporter last year.

“Traders decided they wanted to be bullish about this Russian export thing again,” said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio. “Russia not only supplies wheat to the market, but also feed grains to the market. Buyers are scrambling to get supplies.”

Wheat futures for December delivery rose 13.5 cents, or 1.9 percent, to close at $7.255 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price has gained 9.7 percent this month on improved demand.

Many farmers will plant more winter wheat after they harvest their corn this year because of the price, Gartner said. That happened in 2008 when the grain reached a record $13.495 a bushel in Chicago. Growers seeded 37.7 million acres with winter wheat last year, down 13 percent from 2008, USDA data show.

“When wheat starts hitting $7 and $8,” farmers will plant more, Gartner said. “I don’t see why they wouldn’t shift some acres into wheat again. They’re going to have an early corn harvest, which will work in their favor, and they have good moisture conditions to double-crop. Farmers respond financially.”

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.

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