BLBG:Wheat Futures Gain on Russia Frost, U.S. Seen More Competitive
Wheat futures rose for a second day in Chicago as freezing temperatures may have damaged some winter grain in Russia and on speculation three weeks of declines have made U.S. supplies more competitive.
Temperatures dropped to minus 25.8 degrees Celsius (-14.4 Fahrenheit) in the city of Samara in the Volga region overnight, data from the U.K. Met Office show. Russia’s southern Volga and Southern District as well as east Ukraine had little snow cover, World Ag Weather reported Dec. 21.
“In Russia, the extremely cold temperatures could have caused some frost damage in the regions with a lack of snow cover, such as those in the south of the country,” Paris-based farm adviser Agritel wrote in a market comment.
Wheat for March delivery advanced as much as 0.5 percent to $7.9625 a bushel on the Chicago Board of Trade, and was at $7.9375 at 11:25 a.m. Paris time. Milling wheat traded on NYSE Liffe in the French capital for delivery the same month advanced 0.1 percent to 253.75 euros ($335.23) a metric ton.
The Volga region accounts for about 26 percent of Russia’s wheat production, while the Southern District region grows about 28 percent of the country’s crop, U.S. Department of Agriculture data show.
Chicago wheat futures dropped 2.7 percent last week and the grain has slumped 8 percent this month, on track for the biggest monthly decline since September 2011. Wheat in Chicago has still gained 22 percent this year, the best performance on the Standard & Poor’s GSCI Index of 24 commodities this year, as drought in Russia and Ukraine reduced export supplies.
U.S. Wheat
“U.S. wheat is very competitively priced and U.S. export sales activity should be improving in the weeks ahead,” wrote Duane Lowry, publisher of Early Market News in Maynard, Iowa. “We shouldn’t see any downside momentum build we and we shouldn’t see any serious test of last week’s lows.”
Soybeans rose 0.2 percent to $14.325 a bushel. The oilseed lost 4.2 percent last week, the first drop in five.
“Traders have no real convictions during this holiday week and approach of year-end,” Lowry wrote. “Expect stabilization and recovery to be developing themes during the next two weeks.”
CBOT grain-futures trading will end at noon local time today ahead of the Christmas holiday and remain closed tomorrow. Derivatives trading on NYSE Liffe will be halted today at 1 p.m. Paris time, and markets will remain closed on Dec. 25 and 26 before trading resumes on Dec. 27.
Corn for March delivery increased 0.5 percent to $7.0525 a bushel, set for a 6.3 percent drop this month, which would be a fifth consecutive loss. Corn, which surged to a record in August, has advanced 9.1 percent this year.
To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
