This sends US wheat futures prices up the daily limit, prompting one analyst to predict that higher feedgrain costs could curb US chicken and pork expansion in the second half of 2010.
Drought in Russia is expected to cut its wheat crop by as much as 25%. Russia is the fourth-largest exporter of wheat globally.
Even before the ban announcement, poor weather in Eastern Europe and Canada, coupled with increased speculative interest, had contributed to a 68% rise in wheat futures prices.
“Undoubtedly, Russia’s ban on wheat exports has implications across the (agriculture) and protein industries,” said BMO Capital Markets analyst Kenneth Zaslow in a note to investors.
Zaslow predicted elevated feed costs could cause chicken and hog producers to limit the expected production increases in the back half of 2010.
Source: MeatingPlace
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