Putin Announces Temporary Export Ban on Wheat

Grain-related shares in Asia rose Friday while those of some food processors sank, as wheat futures continued to jump, and investors pondered the long-term impact of Russia's move to ban wheat exports.

Russian Prime Minister Vladimir Putin announced the temporary export ban after a drought devastated much of his country's crop, according to MarketWatch.

Japan , Asia’s second-largest wheat buyer, is seeking U.S. supplies for livestock feed after Russia halted exports because of the worst drought in at least 50 years.

The country buys Russian wheat and barley for feed makers, and imports milling wheat for bread and cookies exclusively from the U.S., Canada and Australia, Shirara Shiokawa, director at the grain trade division of the Ministry of Agriculture, Forestry and Fisheries, said today.

Wheat futures in Chicago jumped to a two-year high after Russia, the third-biggest grower, banned exports of the grain as well as barley from Aug. 15 to Dec. 31.

This will boost demand for grains from the U.S., the biggest exporter, as Canada and Europe also brace for reduced production because of adverse weather, said Charlie Utsunomiya, director at the Tokyo office of U.S. Wheat Associates, Bloomberg says.