Wheat prices hit a two-year high earlier this month in our country due to severe drought in Russia has destroyed about one-fifth of the grain exporter's harvest. Russia has lost exports for the rest of the year because of damage from the weather.

Drought in Ukraine and heavy rains in Canada has also hurt crops. Ukrainian officials on Wednesday terminated a decision on whether to limit grain exports from September to December because of dry weather hurting the harvest. A decision is expected on August 25, Barclays commodities analysts reported.

The December contract gained 5 cents to settle at USD 6.9 a bushel, its first advance after three days of losses. The September contract peaked earlier this month at USD 7.9 a bushel, the highest price since August 2008, when Russia proclaimed about its intention to cut off exports. It has since drifted lower, but could approach the high if drought conditions prevent farmers from planting winter wheat.

"We expect a trend of shifting import demand to United States wheat exports in the absence of Black Sea exports," Barclays reported in a research note Tuesday, pointing to a recent shipment of United States of America wheat to Egypt. Egypt has typically gotten the bulk of its wheat from Russia.