Wheat slides after Russia says no plans to curb exports

PARIS/SINGAPORE: Chicago wheat futures dropped nearly 3 percent on Tuesday after Russia's agriculture ministry said it had no plans to restrict grain exports, dampening speculation about possible curbs to shipments from the world's biggest wheat supplier.

Soybeans edged lower as concern over a swine flu outbreak in China reducing demand for animal feed added to ongoing worries about a tariff dispute between Washington and Beijing.

Corn also ticked lower.

The most-active wheat contract on the Chicago Board of Trade had dropped 2.8 percent to $5.30-1/2 a bushel by 1232 GMT.

US markets were closed on Monday for the Labor Day holiday.

Soybeans eased 0.3 percent to $8.41 a bushel, while corn was down 0.4 percent at $3.63-1/2 a bushel.

Russia's agriculture ministry does not see a need to impose export duty or curb grain exports in any other way, it said in a statement after a meeting with exporters on Monday.

The news had pushed European futures lower on Monday, and the reopening of US markets on Tuesday added to selling momentum.

A sharp expected fall in Russian wheat production and fast exports at the start of the season have fuelled speculation that the world's top wheat supplier will limit flows.

Reports of good spring wheat yields in Siberia in the ongoing harvest have raised the potential for upward revisions to the Russian crop but traders and analysts remained cautious about Russian export capacity.

"Spring wheat yields in the country are better than expected, but the cost of transporting them to Black Sea ports is high and should not allow Russia to significantly exceed 30-32 million tonnes of wheat exports," consultancy Agritel said in a note.

Russia's agriculture ministry has projected wheat exports at 35 million tonnes.

However, the ministry's rejection of export curbs coupled with sluggish US and European Union exports were encouraging prices to ease.

A firmer dollar, as the currency benefited from worries over emerging markets and the US-China trade standoff, also underscored a lack of export competitiveness for US wheat.

"Russia had a record crop last year and this year the crop is not record-sized but is still decent, that is why Russian wheat is still one of the cheapest in the world," said an India-based agricultural commodities analyst.

The news from Russia overshadowed developments in Argentina, where growers and consultants said farmers may delay wheat sales and plant less corn this year after the government announced a roughly 10 percent export tax on the grains as part of an austerity programme.

The soybean market is being weighed down by concerns over demand in China following the outbreak of a swine flu which could reduce demand for soymeal.