Wheat rose for the first time in three sessions on speculation that the prolonged drought in Russia will slash output further, boosting demand for grain from the U.S., the world’s largest exporter, reported “Kazakh-Zerno” IA with reference to the “Bloomberg“.
The harvest of crops including wheat, barley, rye and corn may drop below 80 million metric tons, compared with the current estimate of 85 million, Deputy Economy Minister Andrei Klepach said today. Russian grain traders may halt new export agreements because the government may limit shipments, the Moscow-based researcher SovEcon said last week.
“People are concerned that Russia may ban exports,” said Brian Grete, the senior market analyst for Professional Farmers of America Newsletter in Cedar Falls, Iowa. Demand may increase for crops from the U.S., Grete said.
Wheat futures for September delivery rose 5.5 cents, or 0.9 percent, to $5.95 a bushel on the Chicago Board of Trade, after falling 1.2 percent the previous two sessions. The price has risen 39 percent since June 9 as drought damaged crops in parts of Europe and Russia, while too much rain in Canada reduced the area farmers planted this year.
Russia’s grain harvest may fall below 70 million tons as yields drop amid the worst drought in at least a decade, SovEcon said today. The U.S. Department of Agriculture forecast Russian production of wheat and feed grains at 79.8 million tons earlier this month, down from 93.5 million last year.
The price of wheat in the European part of Russia rose 15 percent to 4,850 rubles ($160) a ton in the week ending July 23, SovEcon said. Barley added 30 percent to 3,350 rubles a ton during the week, while rye climbed 33 percent to 3,400 rubles a ton.
“The trend has shifted from rising inventories to declining supplies, said Chad Henderson, a market analyst for Prime Consultants Inc. in Brookfield, Wisconsin.
Wheat is the fourth-largest crop in the U.S., valued at $10.6 billion in 2009, behind corn, soybeans and hay, government figures show.