Wheat futures rose, capping the first annual gain in three years, on speculation that winter storms in the U.S. Great Plains failed to provide enough moisture to improve some crops.
Northwest Kansas, eastern Colorado and western Nebraska got as much as 4 inches (10 centimeters) of snow yesterday, while much of southwest Kansas, Oklahoma and Texas missed out on the storms, said Joel Widenor of Commodity Weather Group LLC. Much of the Great Plains had less than 25 percent of normal precipitation in the past 30 days, he said. Kansas is the biggest winter-wheat growing state.
“They caught a pretty good shot in Nebraska and a little in western Kansas,” said Mark Schultz, the chief analyst at Northstar Commodity Investment Co. in Minneapolis. “Texas kind of got skipped, and part of Oklahoma and southwest Kansas.”
Wheat futures for March delivery rose 9.5 cents, or 1.2 percent, to settle at $7.9425 a bushel at noon on the Chicago Board of Trade. The price climbed 47 percent this year, the first gain since 2007, as adverse weather cut production in Russia and threatened crops in Australia and the U.S., the world’s leading exporter.
Only about a third of southwest Kansas got 1 inch to 4 inches of snow yesterday, while “scattered” rain and snow fell in Oklahoma and West Texas, said Widenor, the director of agricultural services in Bethesda, Maryland.
Snow cover in northern growing areas should protect crops from temperatures that will drop to about zero degrees Fahrenheit (minus 18 Celsius) during the weekend, he said.
“Only the areas that have snow cover may be able to dip down close to the thresholds” where temperatures may cause crop damage, Widenor said. “I don’t think they’ll have any issues, but we’ll have to keep an eye on it the next few nights.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.
Trading closed early today for the New Year’s Eve holiday.
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