Russia will impose an export ban on grain and grain products from Aug. 15 to Dec. 31 as the country’s worst drought in half a century cuts yields.

Prime Minister Vladimir Putin’s spokesman, Dmitry Peskov, gave the dates of the ban by telephone in Moscow today. Earlier, Putin said a ban would be “appropriate” after drought and record heat in central Russia and along the Volga River forced the government to declare a state of emergency in 28 crop- producing regions.

Wheat extended a rally to the highest price in 23 months on the ban. Wheat for December delivery, the contract with the largest open interest, advanced as much as 7.9 percent to $8.155 a bushel in Chicago today, the highest level since August 2008.

“As of today, Russia has no grain market,” said Kirill Podolsky, chief executive officer of Valars Group, the country’s third-biggest grain trader. “This will be a catastrophe for farmers and exporters alike.”

Russian companies may cancel shipments of about 600,000 metric tons of wheat to Egypt because of the ban, Podolsky said. Valars will stop exports immediately, including a pending 60,000-ton shipment to Egypt, on concerns that customs officers will hold up shipments until the ban comes into effect, he said.

‘Sufficient Reserves’

The Agriculture Ministry cut its grain crop forecast to as low as 70 million metric tons compared with 97.1 million tons last year. Agriculture accounts for about 4 percent of gross domestic product, according to Moscow-based VTB Capital.

Russia has “sufficient reserves” of grain, Putin told a government meeting, “but we must prevent domestic prices from rising, preserve cattle herds and build up reserves for next year.” The government will consider what to do next after December, when this year’s harvest is tallied, he said.

Russian Grain Union President Arkady Zlochevsky earlier said a quick move to halt exports would hurt the market because traders need advance warning in order to meet contracts.

Heat and drought continue to plague Russia’s heartland. Wildfires have killed 50 people to date.

Fires concentrated in central Russia and the Volga River region have scorched 712,412 hectares (2,751 square miles), an area about three times the size of Luxembourg, the Emergency Situations Ministry said in an e-mailed statement today. Crews are battling 589 fires on 195,834 hectares, the ministry said.

Dry and hot weather with “high” and “extreme” fire danger will persist in most areas of European Russia at least through Aug. 7, the state Hydrometeorological Center said on its website today. Fire danger will also be high in the Ural Mountains and the Tomsk region in Siberia, it said. Temperatures broke all-time records in five Russian cities yesterday.