The world's biggest wheat seller added Ukraine to the list of the countries which might impose crop export restrictions, but warned against investors betting on spiking wheat prices.

The "supply concerns" fostered by the dire condition of drought-stressed autumn-sown crop could tip Ukraine, which claims fourth rank amongst global grain exporting countries, into trade restrictions already the subject of speculation in neighbouring Russia, the Canadian Wheat Board said.

"There have been no firm indications yet that Ukraine will impose any form of tariff or export restriction, but it remains a possibility, given both winter-wheat prospects and previous actions by its government," the board said.

Ukraine in 2010-11 imposed export quotas, following a drought-depleted crop, and only three months ago removed grain export tariffs aimed at raising money for depleted state coffers - duties which merchants blamed for getting the country's shipments in 2011-12 off to a poor start.

Slow enough already?

Subsequently, fears for crops planted for the 2012 harvest - concerns crystallised on Thursday by a ProAgro forecast that Ukraine's grains harvest could plunge 30% this year - have depressed shipments, as farmers hold-off sales in expectation of higher prices ahead.

Indeed, analysis group UkrAgroConsult - while highlighting rumours of export restrictions, and a government target of doubling stocks over the season - questioned the wisdom of curbs given the poor pace of trade so far.

Wheat exports have, more than half way through the season, reached 2.6m tonnes, well below a potential 7.6m tonnes, while barley exports "have stopped", UkrAgroConsult analyst Liza Malyshko told Agrimoney.com.

And restricting corn shipments looked "out of the question" given the record harvest.

"However, of course, no-one can guarantee the absence of [export] duties in the future," Ms Malyshko added, noting Ukraine's quest to boost its finances.

'Legitimate concern'

The CWB's comments come three days after rumours of trade curbs by Russia and Argentina, the second-ranked corn exporter, lifted grain prices.

The board, the biggest single shipper of barley and wheat, added that it considered a "possibility" that Russia's government would fulfil its promise to curb shipments when they reach a target set, in differing statements, at 23m-25m tonnes.

And it termed as a "legitimate" concern the lack of snow in western Canada, which has provoked fears of depleted soil moisture reserves when the growing season arrives.

"Northern hemisphere conditions are starting to attract market attention for potential 2012-13 production outcomes."

'No shortage'

Nonetheless, the board cautioned over expectations of soaring wheat prices, noting that forecasts for 2012-13 production remained "substantial", at 685m tonnes according to the International Grains Council, only 5m tonnes below this season's record high.

"As a direct result of the record production, world ending stocks are forecast to build year-on-year and are estimated at about 210m tonnes," the board said.

"This is a substantial carry out and, when coupled with another significant production cycle, even with one or two small missteps, the world does not and will not have any significant shortage of wheat.

"On the contrary, supplies will not only be large, but fairly well distributed around the world, meaning that buyers for the remainder of this year and next will have a variety of originations from which to choose."

While there were "short-term reasons to be optimistic" about wheat prices, "in general, wheat fundamentals paint a fairly negative picture".

The board, which in August will lose its monopoly over sales of barley, durum and wheat in western Canada, which produces the vast majority of the national crop, nudged higher estimates for returns to farmers from its highest-protein wheat pools, but trimmed expectations for lower-protein crop.