Wheat swung between gains and drops in Chicago as investors weighed a second snowstorm that brought relief to the drought-stricken U.S. winter crop against prospects for a reduced harvest.
About 23 percent of the winter-wheat crop in Kansas, the largest U.S. grower of the variety, was rated good to excellent by Feb. 24, up from 20 percent at the end of January, as snow boosted moisture, the U.S. Department of Agriculture said yesterday. More than a foot (30 centimeters) of snow was expected in parts of the southern Great Plains, four days after as much as 20 inches fell, National Weather Service data show.
The “second snowstorm in the U.S. plains goes a long way to improving conditions for hard red winter wheat and soil conditions for corn and beans,” INTL FCStone Europe said in a report today. Still, the U.S. wheat crop will shrink 7.4 percent in the year starting June 1 because of the country’s worst drought since the 1930s, Joe Glauber, chief economist at the USDA, said Feb. 21.
Wheat for delivery in May was little changed at $7.05 a bushel on the Chicago Board of Trade at 10:23 a.m. London time. The grain slid as much as 1.1 percent to $6.9775, the lowest price since June 25, and added as much as 0.2 percent. Kansas wheat for the same delivery month fell as low as $7.3275 a bushel and was last down 0.5 percent at $7.3675.
The European Union’s Monitoring Agricultural Resources unit gave “a clean bill of health for European winter grains” in a report apart from the U.K., where soils remain saturated. “No winter-kill damage is reported and the outlook for March remains favorable,” INTL FCStone said.
Milling wheat for delivery in May traded on NYSE Liffe in Paris rose 0.2 percent to 234 euros ($306) a metric ton.
Wheat’s decline on the CBOT reduced the premium to corn to 17.25 cents a bushel, the smallest since May 2012. The grains can be used interchangeably in feed for pigs and chickens.
Corn for delivery in May rose 0.3 percent to $6.8775 a bushel in Chicago and soybeans for the same delivery month slid 0.7 percent to $14.245 a bushel. That put the oilseed’s price at 2.07 times the cost of corn, compared with a 10-year average of 2.43 times. The crops compete for acreage.