Chicago nearby wheat futures briefly broke above $6.00 a bushel for the first time in 13 months on Thursday, driven by concerns over drought in the Former Soviet Union.
The CBOT September wheat future peaked at $6.10 during the session, but closed up 8 1/4 cents at $5.96.
Black Sea exporters — the former Soviet countries of Russia, Ukraine and Kazakhstan — have combined become the world’s largest wheat exporter in the last year, but their current wheat and barley crops are suffering from prolonged drought and heat.
In Russia, official forecasts put the grain crop at 85 million tonnes and private forecaster SovEcon sees it as low as 75 million tonnes. However the country is said to have large stocks from previous bumper crops of 108 and 97 million tonnes.
Ukraine is likely to cut its grain exports in the 2010/11 season to 16 million tonnes from 21.5 million in 2009/10 due to a smaller harvest in 2010, the presidential press service said in a statement.
“May’s grain crop forecast of 46 million tonnes had been reduced by 3.5 million tonnes due to poor weather. Taking into account the new forecast, exports in 2010/11 could total 16 million tonnes,” it said.
Heat is also affecting crops in Germany. Farming association DBV said on Thursday that wheat yields in the 2010 harvest will be between 10 and 20 per cent lower than last year.