Russian officials have decided not to ban grain exports yet, but domestic food security will remain a government priority given a 50% cut in exportable surplus this year.

Although in theory, the decision was bearish for grain markets, the fact that production had been so badly hit by the drought meant global supply and demand would remain tight, regardless of Russian politics.

“Given the strong current export activity in Russia, we can soon expect some limitation of the export activity from this country as Russia can not export more than it has,” said a report by analyst Agritel. “Export taxes remain an option too.”

Russia had started the new season campaign with more than 2m tonnes of export sales, it said.

“With less than 10m tonnes available for export this year, Russia will only be able to export at current pace until the end of November.

“Thus, it is clear that the country will be only minimally present in the world trade during the second half of the campaign.”

Global markets remained steady, awaiting the US Department of Agriculture’s report, due out tomorrow (10 August).

This would reveal the impact of the driest month on record in July, which had decimated corn and soya yields across the US, said Agritel’s report.

“It is the weather in the southern hemisphere that will be under the spotlight in the coming weeks, particularly this year, given the tense situation on the international stage.”