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By Bloomberg

Wheat declined from a seven-month high on speculation that U.S. grain remains too expensive for shippers to benefit from a potential drop in exports from Russia.

Futures climbed 4.9 percent this week amid speculation that rising food prices in Russia would prompt the world’s fourth- biggest exporter to restrict grain sales. U.S. wheat is more expensive than competing supplies in France and the Black Sea region, according to the London-based International Grains Council. The Bloomberg Dollar Index, a 10-currency gauge, rose 10 percent this year, cutting the appeal of U.S. exports.

“Even if the Russian situation regarding an embargo happens, we must remember that French wheat, aided by a weak euro, shall take up any potential shortfall,” economist Dennis Gartman wrote today in his daily Gartman Letter. “The stronger U.S. dollar is beginning to have very real effects upon exporting pricing.”

Wheat for March delivery tumbled 2.9 percent to $6.3625 a bushel at 7:02 a.m. on the Chicago Board of Trade, heading for the biggest drop since September. Prices touched $6.77 yesterday, the highest for a most-active contract since May 20. Milling wheat for the same delivery month in Paris fell 2.1 percent to 197 euros ($242) a metric ton on Euronext, paring this week’s gain to 3.8 percent.

Russia’s biggest group of grain exporters, the National Association of Exporters of Agriculture Products, said it stopped purchases for shipments abroad and called for other shippers to back its decision for a halt until the domestic market stabilizes, according to a statement today, citing the government’s concerns about inflation. The ruble weakened to an all-time low against the dollar this week.

“With the recent price rally in wheat, other countries should be able to fill the worlds demand,” Paul Georgy, the president of Allendale Inc., wrote in an e-mailed note today. Global wheat production is pegged at 722.18 million tons for the 2014-15 season, an all-time high, according to the U.S. Department of Agriculture.

Corn for March delivery fell 1.3 percent to $4.055 a bushel in Chicago, leaving prices 0.5 percent lower this week. Soybeans were down 0.6 percent at $10.37 a bushel, heading for a 1.6 percent weekly drop.