Russia rejects limits on grain export

The Russian government, coping with a drought which has slashed grain yields by a more than a quarter, will not limit grain exports even if its exportable surplus is exhausted, deputy Prime Minister Arkady Dvorkovich said on Friday.

Markets had been bracing for an indication of some controls on Russian grain exports after watching crop forecasts fall week after week as the drought wore on, raising concerns of a blanket ban as happened after similar weather in 2010.

December wheat on the Chicago Board of Trade WZ2 fell 8 cents or 0.9% to $8.95 a bushel, while November milling wheat in Paris BL2X2 stood €2.3 euros or 0.8% lower at €265 a tonne.

While prices abated somewhat, analysts believe export taxes or quotas are still a possibility as Russia seeks to avoid another huge dent to its reputation as a reliable major grain supplier like that of two years ago, when it was world number three wheat exporter.