Wheat rose, heading for the biggest monthly gain since July 2012, on concern dormant winter crops in the U.S. will be damaged after months of frigid temperatures.
Temperatures this weekend will be as much as 30 degrees Fahrenheit (17 degrees Celsius) below normal in the northern Midwest, with colder weather shifting south and east next week, AccuWeather Inc. said. Snow, which can insulate crops from cold damage, and ice are forecast from Kansas to New Jersey through March 3, with another round of winter storms following farther south later in the week, QT Weather said. Government reports showing conditions deteriorated in Texas and Kansas have boosted concerns that crops will be damaged.
"It’s been a long, hard winter," Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney. "Once we see that crop emerge from dormancy, we will start to see some U.S. numbers firming up. There are certainly pockets of concern out there."
Wheat for May delivery rose 0.7 percent to $5.935 a bushel at 6:30 a.m. on the Chicago Board of Trade. Futures are set to climb 6.8 percent this month, the first gain since November and on pace for the biggest increase in more than a year-and-a-half.
Cold temperatures and lingering drought left 47 percent of Texas wheat in poor or very-poor condition as of Feb. 23, up from 44 percent on Feb. 16, the Texas Department of Agriculture said this week. The Kansas crop was rated 35 percent good or excellent, down from 58 percent on Dec. 30, the U.S. Department of Agriculture said Feb. 3.
Milling wheat for November delivery dropped 0.9 percent to 187.75 euros ($259.08) a metric ton on NYSE Liffe in Paris, paring a monthly gain to 2.2 percent. Egypt, the world’s biggest importer, bought 295,000 tons of Russian and Romanian wheat in a tender yesterday, snubbing French and U.S. supplies.
World wheat production may decline to 696 million tons in 2014-15 from 708 million tons a year earlier, the International Grains Council said yesterday, citing "a return to more normal yields from the previous season’s exceptional results."
Soybeans for May delivery fell 0.1 percent to $13.89 a bushel in Chicago. Prices are poised to increase 8.3 percent this month, the most since August, on concern that production in South America will be smaller than expected.
Corn rose 0.3 percent to $4.56 a bushel, set for a second monthly advance.