Wheat jumps to two-week high on winterkill fears
U.S. wheat futures jumped 1.9 percent on Tuesday, heading for a third session of gains amid fears that a return to dry weather in the drought-stricken southern Plains will damage the dormant crop.
Corn and soybean futures were also higher, with corn on track for their seventh straight session of higher prices, as conditions turned dry in Argentina while the U.S. Agriculture Department's forecast last week for tight stockpiles continued to underpin prices.
Benchmark wheat futures for March delivery rose 14-1/2 cents to $7.81-1/2 per bushel at the Chicago Board of Trade, the highest price since the first trading session of 2013. New-crop July wheat gained nearly 2 percent.
There was little rain or snow in the forecast in the Plains and western Midwest regions that grow most of the wheat in the United States, said Joel Widenor, an agricultural meteorologist for Commodity Weather Group.
"Dry weather will prevail in core drought areas of the western Midwest and Central Plains through the last half of January," Widenor said.
A cold snap this week may have caused some minor winterkill in areas of western Nebraska, and a blast of cold Arctic air is expected next week centered on the Midwest, added Don Keeney, a meteorologist for MDA EarthSat Weather.
Conditions are expected to remain dry for the next two weeks in Argentina and southern Brazil, Keeney said.
CBOT March corn - the first contract to reflect the South American harvest - rose nearly 1 percent, or 6-1/4 cents, to $7.30-1/4 per bushel, touching the highest level since Dec.
CBOT March soybeans gained 3 cents to $14.21-1/4.
"What's helping us is the drier profile in southern Brazil and Argentina. About a third of Argentina's crop could move into a concern," said Don Roose, president of the brokerage U.S. Commodities in West Des Moines, Iowa.