HAMBURG: Chicago wheat futures rose on Wednesday after Ukraine's farm minister confirmed the country will ban wheat exports from Nov. 15, so marking the exit of another major Black Sea exporter from the global grains market.
"The Ukrainian export ban is supportive for wheat but it had been widely expected and priced into the market so the price impact is relatively modest," said Rabobank analyst Erin FitzPatrick.
"But the decision will reduce the possibility that more Black Sea region wheat will come into the export sector for the rest of this marketing year."
Soybeans were up, rising for the third day as the market was buoyed by strong demand and concerns about poor weather in crucial South American production areas. Corn was also up, supported by expectations South American exports may start flagging.
But a stronger dollar capped gains in the grains and soybean complex, traders said.
Chicago Board of Trade December wheat rose 0.4 percent to $8.72-3/4 a bushel by 1045 GMT. The contract had been down 0.2 percent when the Ukrainian announcement was made. European benchmark November wheat in Paris was up 0.5 percent at 264.75 euros a tonne.
Chicago November soybeans rose 0.7 percent to $15.64-1/2 a bushel. December corn rose 0.3 percent to $7.58-3/4 a bushel.
Ukrainian Agriculture Minister Mykola Prysyazhnyuk on Wednesday confirmed Ukraine will ban wheat exports from Nov. 15. "There will be a full ban from Nov. 15.
There will be a government order about this. We are not playing games here. We do not have any other option," he told Reuters.
The move followed a drought and heatwave which badly damaged this summer's Black Sea region harvests and has also led to a dramatic fall in Russian grain exports.
"Ukrainian exporters are likely to rush as many exports as possible out of ports in the next three weeks to avoid declaring force majeure," one European trader said. "With Russia expected to leave the market some more demand will no doubt be transferred to the US soft red winter in coming months with a poor crop in Australia also looming."
Soybean market attention was turning towards the weather in South American producers which the global market is banking on to relieve tight global soy supplies.
Soybean futures hit an all-time high on Sept. 4 after drought ravaged US crops following poor South American soybean harvests earlier in the year. Soybean prices have slipped from the peak but the world faces low supplies until the new soybean crops from Brazil and Argentina enter the global market around March 2013.
"The South American weather and soybean demand has supported the soy complex so far in the Wednesday session," FitzPatrick said. "It is still very early to make judgements about the South American crops but near perfect weather may be needed to achieve some of the forecasts for the huge soybean harvests forecast in Brazil and Argentina in early 2013."
"So prices are very sensitive to any negative news about South American weather. With the US soybean harvest almost finished, we are turning towards a South American-weather driven market."
US corn exports are also facing stiff competition from Brazil but there is expectation Brazil's corn export boom could be reaching its limits. Brazil's 2012 corn exports have already surpassed an annual record and the country could replace Argentina as the world's second-largest exporter of the grain this year.
"Corn is also being supported by the possibility that corn exports out of South America will start to slow," FitzPatrick said. "South American corn exports have been under-pricing US corn in export markets for quite a while."
"But this trend may be limited so the fundamentals for corn remain positive especially as we are reaching the end of the US harvest."
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