Grain markets remained relatively calm as Farmers Weekly went to press, awaiting the outcome of key Russian and American reports.
The Russian food security committee was due to meet on Wednesday (8 August) to decide how to protect grain supplies after the drought slashed its exportable surplus by more than 50%. "Any announcement of an export ban or tariff would spark further price rallies," said Leo von Kameke from analyst Offre & Demande Agricole UK.
In southern Russia, harvest was almost 80% complete, and yields were 25-30% below last year, he said. "The situation is very similar in Ukraine where expectations are that production will be 40-50% lower than last year. Kazakhstan has been similarly affected."
The region normally accounted for about 25% of global wheat exports, but this was likely to drop to less than 15% this year, he added. "Lower production will not be offset by increased production in Europe, which will result in an overall deficit, and wheat will have difficulty in replacing the shortfall in US maize."
The US Department of Agriculture would release its next global market report on Friday, with further cuts in maize and soya bean production likely, despite recent rain.