Wheat futures bounced 3% amid fresh concerns over the impact
of Ukraine's crisis on its supplies of the grain, with the country confirming
crop losses and - unconfirmed - market talk of potential export curbs.
Wheat futures for September recovered from early losses to
stand 2.5% higher at $5.56 a bushel in morning deals in Chicago.
The bounce was attributed initially to report on the
Interfax news agency that Arseny Yatseniuk, the Ukraine prime minister, had
forecast a loss of 15% in the Ukraine harvest, which would be equivalent
to more than 9m tonnes.
The prime minister's office later clarified that the 15%
losses referred only to the harvests in the Donetsk and Luhansk regions, where
tensions with pro-separatist rebels are worst.
Neither region is actually a major wheat grower, and Luhansk
one of the smaller grain-growing areas overall, although Donetsk is a major
producer of corn and spring barley, as well sunflower seed, according to INTL
A figure of 15% losses would likely equate to less than 600,000
tonnes of grain.
While nearly 3m tonnes of grains have already been harvested
in Donetsk and Luhansk, "a certain percentage of fields in these regions
continue to be dangerous for harvesting", the Ukrane farm ministry said.
'Hard to believe'
Nonetheless, Chicago wheat futures at midday local time
(18:00 UK time) remained well in positive territory, at $5.49 ½ a bushel, a
gain of 1.3%, amid talk that Ukraine is poised to implement some form of export
However, the rumours - which are unconfirmed - were viewed
with great scepticism by commentators including Terry Reilly, senior commodity
analyst, grain and oilseeds at Chicago-based Futures International.
While Ukraine does have a history of curtailing grain shipments,
"I find it hard to believe that when people have been talking of a record
63m-tonne harvest they will see the need to limit exports," Mr Reilly told
Agrimoney.com, terming the rise in prices a selling opportunity.
"We do not see why they could do this, especially when
producers need to collect whatever cash they can" to pay for autumn sowings,
with credit hard to come by, and expensive, in Ukraine.
A European trader reported periodic rumours of Ukraine
clampdowns on exports, but said that "none have come true. I would be sceptical
about this one too".
However, Mr Reilly said that he was increasingly concerned
over Ukraine harvest prospects for 2015, given the continued unrest in Ukraine,
and the knock-on effects on credit availability and, through a tumbling
hryvnia, on the affordability of imported farm inputs.
Separately, egg producer Avangardco on Tuesday raised the potential for a legal challenge to a move by Crimea's Russian-backed government
to compulsorily purchase a poultry farm in the peninsula.
Avangardco has also seen an eastern Ukrainian feed mill
overtaken by rebels, and has cut back operations at egg production plants in the
Other groups affected include Cargill, which said on Tuesday
that it had received reports of a fire at a Donetsk sunflower-seed crushing
plant, reportedly after a missile attack, while poultry-to-grains group MHP reported
this month it has suspended operations at a hatching egg farm in Donetsk.