RUSSIA and other former Soviet Union states such as Ukraine will continue to set the agenda in terms of world wheat exports over coming years, while the Chinese economy will remain critical in regards to the strength of the economies of key wheat exporters, such as the former Soviet Union, Australia and the US.
That is the view of the senior economist and executive director of the CME Group Erik Norland.
The CME Group runs many of the world's most influential futures products, such as the Chicago soft wheat and corn contracts.
Speaking during a visit to Australia last week for the Australian Grains Industry Conference, Mr Norland said already Russia and Ukraine as a block were the dominant influences on pricing.
"The two countries combined now are by far and away the biggest source of wheat exports globally."
"Already we see a really strong correlation between hard red winter wheat, or Kansas City, futures and the Russian ruble, reflecting the competitiveness of Russian wheat on the world market according to its currency movements and the marginal changes it makes to cost of production."
Mr Norland said he expected further growth in production and exports out of the Black Sea region.
"There is still scope for further technological, mechanical and supply chain improvements, but what we've seen over the past decade is a climate that is relatively reliable in terms of producing cereal crops and a low cost of production."
Already, he said key importers close to the Black Sea, such as Egypt and the Middle East were virtually 'completely dependent' on Black Sea wheat, while he forecast wheat from the region to flow in increasing volumes to eastern and south-eastern Asia.
"Freight costs are currently low and there's no real reason for them to come up unless fuel spikes so that makes the task of bringing the grain a long distance into Asia that bit easier."
Mr Norland said Asia would be the logical expansion target for Russian exporters.
"There is no incentive to look west, the European Union is a net importer in its own right, Africa is a difficult market so logically they will look to Asia," he said.
At the other end of the supply chain, Mr Norland said China remained important for key wheat exporters such as Russia, the US and Australia.
"Despite their differences in volatility the Australia and US dollars, wheat prices and the Russian ruble all share a common denominator in that they respond strongly to economic conditions in China," he said.
"When China's growth picks up, it tends to send the price of energy and industrial metals higher, which, in turn, strengthens the currencies of major resource exporters such as Russia, Brazil and Australia."
"The opposite happens when China slows: weaker growth reduces demand for energy and metals, typically lowers the value of commodity-exporting currencies."
In positive news for Australian wheat producers hoping to compete for market share into Asia, Mr Norland forecast robust financial conditions in Russia which in turn will keep the ruble at solid levels.
"The fiscal health in Russia could make the ruble a relatively strong currency among emerging markets to the likely benefit of wheat farmers in the US, Australia and elsewhere."