Wheat Gains on Concern Low Temperatures Damaged European Crops
Wheat rose in Chicago on concern freezing temperatures damaged crops in Europe and the Black Sea region, which supply more than a third of the world harvest. The grain touched the highest price since June in Paris trading.
Temperatures reached minus 15 degrees Celsius (5 degrees Fahrenheit) in France’s Alsace and Lorraine regions yesterday morning, according to forecaster Meteo France. In northern Germany, where some areas lack snow cover, soil temperatures have dropped below minus 8 degrees Celsius, Deutscher Wetterdienst said.
“Extreme cold” in Russia and Ukraine will probably add to above-average winter kill of wheat this year, DTN Telvent wrote Feb. 3. Frost in Europe threatened wheat and rapeseed over the weekend, with the highest risk in Poland, Germany and Romania and some risk for France, the forecaster reported.
“The current weather conditions obviously continue to put the market under tension, with worries of damage to crops in regions where the snow cover is little or not present,” Paris- based farm adviser Agritel wrote in a market comment today. France and Germany are the two largest wheat producers in the 27-nation European Union.
Wheat for delivery in March advanced 0.4 percent to $6.635 a bushel by 12:04 p.m. London time on the Chicago Board of Trade, paring an increase of as much as 0.7 percent. Prices gained 9.7 percent in the three weeks before this week.
Open Interest
Milling wheat for March delivery traded on NYSE Liffe in the French capital, the most active contract, climbed 1.6 percent to 220.75 euros ($287.92) a metric ton after reaching 222.50 euros. The November contract, which has the greatest open interest, rose 0.3 percent to 200 euros.
Soybeans for March delivery gained 0.6 percent to $12.395 a bushel in Chicago, while corn for delivery in the same month advanced 0.4 percent to $6.47 a bushel. Both crops increased for a third week last week.
Dry and hot weather continued to stress plants in the Brazilian states of Parana and Rio Grande do Sul, while late- sown crops in Argentina need rain, DTN Telvent reported.
“Uncommonly and severely hot temperatures prevail in the soybean- and corn-growing regions of Argentina and Brazil, putting upward pressure upon corn and bean prices generally but upon bean prices particularly,” economist Dennis Gartman wrote in his daily Gartman Letter.
Argentina is the world’s second-biggest corn exporter and Brazil ranks second for soybeans, following the U.S. in both cases.
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
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