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 black earth region and the lower Volga region had light and spotty snow cover, threatening winter kill in areas with little protective snow layer, Telvent DTN wrote today.
“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 $7.945 at 2:42 p.m. Paris time. Milling wheat traded on NYSE Liffe in the French capital for delivery the same month rose 0.4 percent to close at 254.50 euros ($336.47) 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 fell 2.7 percent last week and have slumped 8.1 percent this month, on track for the biggest monthly slide 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 prices are extremely competitive and increasing export sales activity is likely to develop and buying interest is likely to shift to the U.S.,” wrote Duane Lowry, publisher of Early Market News in Maynard, Iowa.
Soybeans rose 0.2 percent to $14.3175 a bushel. The oilseed lost 4.2 percent last week, the first drop in five.
“It is difficult to build conviction and interest during the last trading week of the year,” Lowry said. “All markets are poised for full recovery of recent declines during the next several weeks, but speed of recovery is in question.’
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 halted early today 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.