Wheat Rises on Signs Russia May Extend Grain-Export Ban by Up to 11 Months
Wheat futures rose after Prime Minister Vladimir Putin indicated that Russia, a leading global exporter, may extend a ban on grain exports by as long as 11 months.
“We can only review lifting the ban on grain exports after the next year’s crop is harvested and we have clarity on the balances,” Putin said today. The export ban, originally set from Aug. 15 to Dec. 31, may last until November 2011, the time that the country normally completes its harvest. The most-severe drought in at least 50 years has slashed production.
The drop in exports from Russia and other parts of Europe boosted demand for supplies from the U.S., the leading producer and shipper. From June 1 through Aug. 26, overseas buyers committed to purchase 14.1 million metric tons of U.S. wheat, up 59 percent from a year earlier, government data show. Russia tied last year with Canada as the second-largest exporter.
Wheat futures for December delivery rose 5 cents, or 0.7 percent, to close at $7.1375 a bushel at 1:15 p.m. on the Chicago Board of Trade. On Aug. 6, the price reached $8.68, the highest level for a most-active contract in two years. The grain has soared 58 percent since June 1.
Forecast Slashed
Russia slashed its forecast on grain output to 60 million to 65 million tons from the original estimate of 97.1 million tons, the same as last year’s output. The export ban was imposed on Aug. 5.
U.S. exporters have shipped 5.97 million tons since June 1, up 31 percent from a year earlier, USDA data show. Yesterday, Egypt, the biggest buyer, bought 225,000 tons from the U.S. for shipment from Oct. 11 through Oct. 20.
“Demand for wheat continues to be strong, obviously bolstered by problems in Europe,” said Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage in Des Moines, Iowa.
The harvest in Saskatchewan, Canada’s biggest grain producer, has been slowed by wet weather, the province’s Ministry of Agriculture said today. About 8 percent of crops were harvested, up from a five-year average of 28 percent.
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.
Rate this Page