Wheat Drops as Importing Nations May Turn to Russia, Ukraine for Supplies

Wheat futures fell, erasing earlier gains, as importers of the grain turn to Russia and Ukraine for cheaper supplies after the countries raised their export restrictions earlier this month.

Russia said today it would ship 18 million metric tons of grain in the year from July 1, up from as much as 17 million previously forecast. Ukraine may double its grain exports from last year after drought devastated its crop, the government said. Egypt said it bought 180,000 tons of Russian wheat at a tender last week and may consider purchasing Ukraine wheat.

“The general vibe in Kiev was that they’re going to have a decent harvest in terms of volume,” said Dave Norris, an independent grain broker in Harrogate, England, who said Russian wheat is selling for $40 a ton less than EU wheat. “It seems like a smart move to me for Egypt to now re-accept Ukraine wheat their tenders.”

Wheat for September delivery fell 0.5 cent to $6.965 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. The price has gained 14 percent this month. Milling wheat for November delivery on NYSE Liffe in Paris fell 0.1 percent to 199 euros ($281) a ton.

Russia ended an export ban on grains on July 1 after the worst drought in a half century curbed production last year.

Corn for December delivery fell 5 cents, or 0.7 percent, to $6.7275 a bushel in Chicago. The price declined 1.4 percent yesterday, the biggest loss since July 1. Soybeans for November delivery were little changed at at $13.86 a bushel in Chicago.

Earlier corn futures gained on speculation that hot weather in the U.S. Midwest would curb production and wheat rose on expectations wet weather would delay the harvest in the European Union, producer of a fifth of the grain in world.

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

To contact the editor responsible for this story: John Deane at Jdeane3@bloomberg.net.