cryptogon.com

The fear that Russia, a major wheat producer, will have to cut exports by at least 30 percent is good news for U.S. farmers, who now are getting more money to go along with a bumper crop this year.

That big harvest, analysts point out, should spare U.S. consumers much increase in the prices of bread and other wheat-based foods despite the problems in Russia.

Any price increases will hit consumers hardest in wheat-deficient areas such as the Middle East, Africa and parts of Asia.

The severe drought in Russia is thought to be the country’s worst in 130 years. Most of the damage to the wheat crop has been caused by the drought, but now wildfires are sweeping farmlands in western Russia.

The Associated Press reported that the director of a small state farm outside Moscow said fire destroyed its entire wheat crop one night before the harvest.

“The fruits of the year’s labor of the farm went up in smoke. This is very painful,” Pavel Grudinin, director of Lenin State Farm, said on Russian television.

The drought is also affecting harvests in Ukraine and Kazakhstan, Russia’s neighboring wheat-producing countries.

Troubles with wheat crops aren’t confined to that part of the world. Heavy rains during the planting season destroyed much of Canada’s crop. The Canadian Wheat Board, the marketing agency for the country’s farmers, is forecasting a 35 percent drop in the harvest.

The crop disasters have fed an unyielding price rally. In July alone, prices at the Chicago Board of Trade surged 42 percent, the biggest monthly gain in half a century.

In Chicago, wheat prices breached $7 a bushel Tuesday for the first time since September 2008.