Grain futures advanced on Monday, wheat gained amid potentially harmful weather conditions in the US, the largest exporter of the grain.
On the Chicago Board of Trade, wheat futures for settlement in March added 0.92% to trade at $5.7038 per bushel by 14:31 GMT. Prices jumped to a session high of $5.7038, while day’s bottom was touched at $5.6538. On January 10th prices touched $5.6088 per bushel, the weakest since July 2010. Last week, the grain settled 0.6% higher, snapping seven weeks of declines, the longest losing streak since October 2008.
Wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.
Plants that lack a good quantity of snow cover “are at risk of being damaged by the icy weather that is also forecast for next week,” said last week Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, cited by Bloomberg.
According to data by the US National Weather Service, the majority of the central and southern Plains, encompassing producing areas from Nebraska to Texas, don’t have any snow cover to insulate wheat crops from freezing cold temperatures.
DTN’s January 24th forecast also called for subzero Fahrenheit cold early this week, that may cause some potential damage to any unprotected wheat in northwest Ohio and northern through central Indiana. According to the website, snow cover will insulate the crop from the frigid temperatures, but some areas with less snow may be at risk.
Meanwhile, DTN reported that a secondary surge of cold weather in the Southern Plains wheat areas early this week bears watching. For now, temperatures seemed not low enough to harm the well-established and dormant at this time of the year wheat crop.
Elsewhere on the grains market, soybeans futures for settlement in March rose 0.36% to trade at $12.8963 per bushel by 14:34 GMT. Prices touched a session high at $12.8963 per bushel, while day’s low stood at $12.8300 per bushel. The oilseed settled last week 2.3% lower.
Corn up as well
On the Chicago Board of Trade, corn futures for March delivery advanced by 0.44% to trade at $4.3088 a bushel by 14:34 GMT. Futures held in a range between day’s high and low of $4.3088 and $4.2788 per bushel. On January 10th prices touched $4.0638 per bushel, the lowest since August 2010.
The grain settled last week 1.05% higher after it lost nearly 40% in 2013, the steepest annual drop on record amid expectations the global output will surge to 964.3 million tons in 2013-2014 season, boosted by record production in the US, the world’s top producer.
Corn prices were pressured following DTNs January 24th forecast, which called for mostly favorable conditions across the three biggest corn producers, Brazil, Argentina and South Africa. In southern Brazil, favorable conditions will be maintained by increasing showers and thundershowers in Rio Grande do Sul, following last weeks hot weather.
In central Argentina, thunderstorms that have occurred last week will help to ease some stress on corn and soybeans. However, the extreme heat in the previous week may have limited the yield potential, as some of the corn crop was in a reproductive phase.
South Africa will experience seasonal to slightly above average temperatures during the next 5-7 days, with some potential for a few afternoon thundershowers at times. According to DTN, conditions will be mostly favorable for reproductive to filing corn during the observed period.