The following article is from Bloomberg:
Wheat Rebounds as Putin Extends Ban on Grain Exports From Russia
October 22, 2010
By Whitney McFerron
Wheat futures rebounded from a two- week low after Russia extended its ban on grain exports to preserve domestic supply.
Russia, once the world’s third-largest wheat exporter, extended its ban until July 1, Prime Minister Vladimir Putin said today. The country said in August it would halt exports until the end of this year, after drought ruined crops. Global wheat stockpiles will total 174.66 million metric tons on May 31, down 11 percent from last year, the U.S. Department of Agriculture said Oct. 8.
Prolonging the shipment ban is “a little psychologically supportive” to prices, said Shawn McCambridge, the senior grain analyst for Prudential Bache Commodities LLC. “Most people are not expecting Russia even to consider coming back in until after next year’s harvest,” he said.
Wheat futures for December delivery climbed 2 cents, or 0.3 percent, to settle at $6.7075 a bushel at 1:15 p.m. on the Chicago Board of Trade. Futures still dropped 4.8 percent this week, the second straight weekly decline. The grain is up 40 percent since the end of June because of the Russian drought.
Futures also rose after yesterday’s 2.1 percent slide, which may have created a “buying opportunity” for end-users and speculators, said Larry Young, the president of Covenant Trading LLC in Chicago.
Earlier, futures slumped to $6.65, the lowest level since Oct. 8, as rain improved prospects for winter crops recently planted in the U.S. Great Plains.
Kansas, the biggest winter-wheat-producing state, may receive 0.5 inch (1.3 centimeters) of rain today, according to AccuWeather Inc. Some areas have had half of the normal amount of rainfall in the past 30 days. Wheat farms in Oklahoma and Texas also are expected to have thunderstorms today.
“It’s hard to get much of a rally out of wheat with this system moving through the Plains, which we really needed,” said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. “It’s a very slow-moving system at this point that’s done a good job of giving west Oklahoma, especially, some good rain.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show. The U.S. is the world’s largest exporter.
–Editors: Steve Stroth, Daniel Enoch.