Apr 20, 2014
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U.S. Crops Expected to Escape Freeze Damage

January 7, 2014
Winter Feeding
The extreme cold across the central U.S. is “overall pretty bullish” for cattle futures as animals gain less weight and consumer demand climbs, Lane Broadbent, president of KIS Futures Inc. in Oklahoma City, said.  
 
 

U.S. crops are escaping record-setting cold weather with little damage, while the arctic blast drove cattle prices to a record as animals struggle to gain weight.

The coldest spots in Florida citrus groves were near freezing, and oranges aren’t damaged unless temperatures are below 28 degrees Fahrenheit for a few hours, said Dale Mohler, a senior meteorologist at AccuWeather Inc. in State College, Pennsylvania. Snow cover helped insulate wheat plants, according to DTN/Progressive Farmer. Cattle extended a rally to a record for the seventh straight session.

The frigid weather strangled transportation routes around the country including interstate highways, airlines and rails. It also led to a surge in energy demand that pushed power in Texas to more than $5,000 a megawatt-hour for the first time and caused disruptions at oil refineries in Tennessee and Illinois. Orange-juice futures fell today after climbing 2.8 percent yesterday, the most since early November.

"The worst of it has gone by, especially in the Midwest," Claudio Oliveira, the head of trading at Castlestone Management LLC in New York, said in a telephone interview. "I do expect grain prices to come off now, and I’d expect the same thing to happen in the orange-juice market."

The Standard & Poor’s GSCI Agriculture Index of eight crops slid 0.3 percent to 351.03 at 3:17 p.m. in New York, after rising 0.6 percent yesterday. The S&P gauge of 24 commodities climbed 0.3 percent. Cattle futures reached $1.37225 a pound, the highest since Chicago trading began in 1964.

 

Record Lows

 

Yesterday’s low in Chicago reached a record for the date of minus 16 degrees Fahrenheit, beating the mark of minus 14 set in 1884 and 1988, according to the National Weather Service. As of 8 a.m., it was 4 degrees in New York, breaking a record for the date set in 1896.

Orange juice for March delivery settled 0.2 percent lower at $1.4335 a pound today on ICE Futures U.S in New York. Prices jumped 19 percent last year as the U.S. Department of Agriculture forecast Florida’s crop would shrink to the smallest since 1990 as a crop disease hampers groves. Futures climbed yesterday on concern that cold weather would further reduce supplies.

"The bullet missed them," Mohler of AccuWeather said. "I don’t think this even damaged the vegetable crops, tomatoes and strawberries, which are more susceptible."

 

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RELATED TOPICS: Weather, Wheat, Marketing, Cattle

 
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