CHICAGO: US wheat futures touched a one-week high on Tuesday, rising nearly 3% on fears that frigid temperatures in the breadbasket of the Plains may have damaged winter wheat, analysts said.
Corn and soyabean futures followed the firm trend, with a strong US soya-crushing pace and worries about harvest delays in Brazil lending support. As of 12:58 p.m. CST (1858 GMT), Chicago Board of Trade March wheat futures were up 17-1/4 cents, or 2.7%, at $6.54 a bushel after reaching $6.56-1/2, the contract’s highest since Feb. 9.
CBOT March corn were up 11-1/4 cents at $5.50 a bushel and March soyabeans were up 10-3/4 cents at $13.82-3/4 a bushel.
Wheat led the advance as traders focused on temperatures dropping below 0 degrees Fahrenheit (-18 Celsius) as far south as west-central Texas. Winter wheat was seen as vulnerable to the extreme cold in areas lacking adequate snow cover.
“We won’t know the level of losses from this outbreak for several weeks...but 30% of the US hard red winter wheat was vulnerable to significant freeze damage over the weekend,” Arlan Suderman, chief commodities economist for StoneX, said in a client note.
Hard red winter wheat is the largest US wheat class and Kansas is the top producer of the grain, which is milled into flour for bread. The extreme conditions likely stressed the region’s cattle herd as well, Suderman noted. Soyabean futures drew support from a larger-than-expected monthly soya-crushing figure from the National Oilseed Processors Association, which said its US members crushed 184.654 million bushels of soyabeans in January.
The tally was the second-largest for any month and topped an average of analyst estimates for 183.1 million bushels. “NOPA supported the market. We rallied a little bit off that,” said Jack Scoville, analyst with the Price Futures Group in Chicago.
Brisk domestic and export demand for US soyabeans has eroded stockpiles and the slow arrival of Brazil’s new crop has fuelled supply concerns. Thousands of trucks loaded with grains for export were stranded close to a cargo transshipment station in northern Brazil, oilseeds trade group Abiove said on Saturday.
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