Wheat rose to a 23-month high in Chicago as Russia, the world’s third-biggest grower, banned exports because of the country’s worst drought in at least a half-century.
Halting shipments would be “appropriate” to contain domestic prices that jumped 19 percent last week, faster than at the peak of the global food crisis in 2008, Russian Prime Minister Vladimir Putin said in Moscow. A decree bans exports of wheat, barley, rye, corn and flour from Aug. 15 to Dec. 31.
“As of today, Russia has no grain market,” said Kirill Podolsky, chief executive of Valars Group, the country’s third-biggest grain trader. Valars will stop exports immediately because shipments may be held at customs until the start of the ban, he said. “This will be a catastrophe for farmers and exporters alike.”
A heat wave in Russia, dry weather in Kazakhstan, Ukraine and the European Union, and flooding in Canada has ruined crops and fueled a surge in Chicago wheat prices of as much as 92 percent since June 9.
Russia’s drought is now threatening sowing plans for winter grain and damaging other crops, the national weather center said this week.
Wheat for December delivery rose 59.75 cents, or 7.9 percent, to close at $8.1525 a bushel on the Chicago Board of Trade. Earlier, the price advanced by the CBOT’s 60-cent limit to $8.155, the highest level since August 2008.
