Wheat Has Biggest Two-Day Gain in 21 Month on U.S. Freeze

Wheat futures rose, capping the biggest two-day gain in 21 months, after freezing weather damaged winter crops in the U.S. Great Plains.

On the Chicago Board of Trade, hard red winter wheat futures for July delivery rose 3.1 percent to settle at $7.715 a bushel, bringing the two-day rally to 6.3 percent, the most since July 5, 2012. The contract, formerly traded on the Kansas City Board of Trade, reflects a variety used to make bread. The price has gained 20 percent this year.

As much as 20 percent of plants in the southern Plains faced sub-freezing temperatures last night, and yields in some fields may drop 10 percent, Commodity Weather Group LLC in Bethesda, Maryland, said in a report. The U.S. is the world’s top wheat exporter.

The cold may curb yields in the southern Plains after drought intensified across the region this year. Most fields in Kansas, Oklahoma, and northern Texas, the top three producers of hard red winter-wheat, got less than 50 percent of normal rain in the past two months, according to the High Plains Regional Climate Center.

“Dry weather is a bigger threat to the wheat crop this year because rain now can help the plants grow out of any freeze damage,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “The crops were starting to go backward because of the dry soils, and there are a lot of crops at risk.”

Winter, Spring

On the Chicago Board of Trade, soft red winter wheat futures for July delivery rose 3.3 percent to settle at $7.0975 a bushel. The price has climbed 17 percent this year. The contract reflects the variety used in cookies and cake.

On the Minneapolis Grain Exchange, wheat futures for July delivery climbed 3 percent to $7.4725 a bushel. The price has advanced 18 percent this year. The contact represents high-protein spring grain used to make bread.

The Chicago contracts posted the biggest gains today among the 24 raw materials in the Standard & Poor’s GSCI Spot Index.

Soybeans rose the most in two weeks on speculation that increased demand will reduce supplies in the U.S., the biggest grower.

Record exports will cut domestic soybean reserves at the end of August to the smallest in six years, the U.S. Department of Agriculture said April 9. Domestic processing in March jumped 12 percent from a year earlier to 153.84 million bushels, the highest ever for the month, according to an industry report today. Imports will surge 81 percent to a record 65 million tons this year, the USDA said.

‘Scarcity Problem’

“There’s already a scarcity problem and the crush last month was much higher than expected,” Alan Brugler, the president of Brugler Marketing & Management in Omaha, Nebraska, said in a telephone interview. “Imports will need to come quickly to maintain adequate supplies later this year.”

On the CBOT, soybean futures for July delivery rose 1.6 percent to $14.875 a bushel, the biggest gain since March 31. The oilseed used to make livestock feed and cooking oil has rallied 15 percent this year as dry weather reduced yields in Brazil, the biggest exporter.

Corn futures for July delivery rose 0.1 percent to $5.0975 a bushel in Chicago.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

To contact the editors responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net Steve Stroth

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.