Russia Wheat Prices Fall as Heat Wave May Be Easing, Grain Export Ban Near

Russian wheat prices fell last week as the heat wave that caused the nation’s worst drought in at least 50 years showed signs of easing and a ban on grain exports came closer to taking effect.

Fourth-grade milling wheat, the main export variety, was offered at 6,025 rubles ($197.40) a metric ton on Aug. 13, down 2.4 percent from a week earlier, Moscow-based SovEcon said on its website today. Wheat climbed as much as 19 percent in the week through Aug. 2, according to the research agency.

“We are expecting lower temperatures,” Anna Strashnaya, head of agro-meteorological forecasts at the Federal Hydrometeorological Center, said by telephone today. “Strong rains are unlikely to come before Aug. 19. It’s not yet clear if the rains that may come will be strong enough to help late crops and winter sowing.”

The dry conditions have cost farmers at least 30 billion rubles across 23 regions of the country, First Deputy Prime Minister Viktor Zubkov said in an interview with state newspaper Rossiyskaya Gazeta published today. The national barley crop may fall by almost half this year, according to SovEcon.

Heavy rains and thunderstorms are forecast this week in Russia’s northwest and center and also in the North Caucasus, Siberia and the Far East, the center said on its website today. Siberia may harvest about 15 million tons of grain this year, according to the national Grain Producers’ Union.

Siberian Crop

“Rains will be bad for harvesting conditions in Siberia, but it’s not yet clear how much they could affect the crop,” Strashnaya said.

The drought-hit Bashkortostan region in the Volga Federal District will get heavy rain and thunderstorms tomorrow, followed by the first frosts the day after, with temperatures as low as -3 degrees Celsius (26.6 degrees Fahrenheit), according to the center.

Temperatures in Moscow, which climbed to a record 38.2 degrees Celsius on July 29, will remain in the 30s this week before dipping to 23 degrees on Aug. 20, the center said. It predicted showers, thunder and hailstorms today in six regions of central Russia including the capital.

Still, rainfall expected in central and northwest Russia through Aug. 18 is unlikely to improve conditions for winter crop sowing or ease drought damage, Strashnaya said.

Winter Planting

The export ban went into force yesterday and runs through Dec. 31. The government may adjust the measure’s duration after Oct. 1, depending on this year’s grain crop and the outlook for winter sowing.

This year’s grain harvest will drop as much as 38 percent to as little as 60 million tons because of the drought, according to the state. It originally predicted a 97 million-ton crop, the same size as last year. Twenty-nine crop-growing regions have declared emergencies after dryness killed plantings on 10.8 million hectares (26.7 million acres).

The national grain crop is down 23 percent from last year so far, Interfax reported today, citing Agriculture Ministry data it obtained. Farmers have harvested 39.5 million tons of grain at an average yield of 2.12 tons per hectare, 22 percent lower than last year, the news agency reported.

Yields in the Ural Mountains are 30 percent lower than last year, according to SovEcon. They have declined 28 percent in Siberia, where harvesting has just started, the research agency said today.

Russia’s barley crop may fall to between 8.7 million and 9.3 million tons, SovEcon estimated. The country may import 700,000 tons of the grain in the marketing year that started July 1, almost double the prior year’s 400,000 tons, the researcher said.

Southern Russia and the drought-stricken Volga River region are likely to get rain starting Aug. 19, which may aid local sugar-beet and sunflower crops, according to Strashnaya. Rainfall also is expected in Siberia, where harvesting has just started, she said.