Wheat futures advanced for the first time in four sessions in Chicago trading after Ukraine, the second-largest exporter in the former Soviet Union last year, said it will probably limit overseas sales, following Russia’s restrictions on trade.
Ukraine will likely impose a wheat export quota of 1.5 million metric tons from September first to December 31 to cool domestic prices, Agriculture Minister Mykola Prysyazhnyuk said Monday. Drought and wildfires in the Black Sea region have destroyed crops, sparking fears of shortages. Ukraine shipped 5 million tons in the same period last year, according to researcher ProAgro.
Ukraine shipped 1.1 million tons of wheat from July 1 through Aug. 16, Prysyazhnyuk said. The nation was forecast by the U.S. Department of Agriculture on Aug. 12 to export 6 million tons in the marketing year that began July 1, from 9.3 million tons a year earlier.
Russia, the world’s third-largest wheat grower in the 2009- 2010 season, implemented a ban on grain exports, including wheat, from Aug. 15 through Dec. 31 after the worst drought in at least 50 years slashed production.
Russia, Ukraine and Kazakhstan, the three biggest wheat exporters in the former Soviet Union, accounted for about 27 percent of global trade of wheat, flour and related products last year, according to Bloomberg calculations based on USDA estimates on Aug. 12.
In spite of the wheat market turbulence, corn for December delivery dropped 0.5%, while November-delivery soybeans were little changed.