Wheat Boosted As Weather Slugs Already Poor Crops
Wheat futures prices rose sharply Thursday as bitterly cold temperatures ravaged the already-poor winter crop and warmer, dry weather was forecast to bake it next week.
On other commodity markets, corn futures advanced on surprisingly strong export sales, pork bellies futures jumped to 5 1/2-year high and precious metals gained. The Commodity Research Bureau’s index of 17 commodities rose 0.52 point to 244.43.
Wheat futures gained as bitterly cold weather and blowing snow barreled into the southern Plains winter growing regions. Kansas, Oklahoma and Texas were expected to see freezing temperatures overnight, at a time when the crop desperately needs warm weather to break out of its dormant period, said Dick Loewy, president of AgResource Co. in Chicago.
``We got some snow, but not enough to protect the crops from severe cold,″ Loewy said. ``Without snowcover, you’re going to see more winterkill at a time when the crops are pretty much beaten down already.″
Precipitation has been well below normal this winter in red winter wheat growing areas and has reached critical importance, with nearly 50 percent of the crop rated in poor condition.
Forecasts for the next 10 days paint a gloomy outlook. Temperatures well above normal are expected, with little rain in the forecast.
Wheat for May delivery on the Chicago Board of Trade rose 7 cents to $4.95 a bushel, while the spot March contract rose 10 cents; March wheat in Kansas City rose 7 cents to $5.41 a bushel; while the Minneapolis contract rose 10 1/2 cents to $5.37 a bushel.
Corn futures prices rose sharply after the Agriculture Department reported surprisingly strong export sales occurred last week. Exporters sold 1.45 million tons, with Japan and Mexico making the bulk of the purchases. Net sales were 2.5 times above the previous week and 50 percent above the four-week average.
``People were starting to look for them to fall off, but this week’s sales were outstanding again,″ said analyst David Armstrong at Chicago Corp.
Soybeans futures gained amid rumors Brazil’s soybean crop will be below the USDA’s current estimate of 23 million tons as rain slowed the harvest.
The beans run the risk of acquiring pod and stem blight that turns the seeds moldy, said Michael Cordonier, an agronomist for Chicago-based Corn and Soybean Adviser.
May corn rose 7 cents to $3.88 a bushel; May soybeans rose 3 3/4 cents to $7.30 a bushel.
Pork bellies futures surged on the Chicago Mercantile Exchange amid soaring cash prices and expectations for tighter stocks.
Export demand from Russia and Japan has been extremely strong recently, while hog slaughters are falling. The USDA reported 344,000 head killed Thursday, compared to 352,000 a year ago.
Some 46.5 million pounds of bellies were in the cold storage, but the number is not enough to get through peak summer months, said Dale Benson, livestock analyst at Dean Witter, Discover & Co.
``They have got to put bellies in the freezer at more than 1 million a week to withstand summer drawdowns of 5 to 6 million a week,″ Benson said.
March frozen pork bellies rose 1.93 cents to 68.40 cents a pound, the highest price since Nov. 1, 1990.
Gold futures advanced on the Comex division of the New York Mercantile Exchange amid an absence of producer selling that has been dragging the market lower, said Jeff Singer, a trader at Imperial Bank in Los Angeles.
The rally was aided by weakness most of the day on the stock market, a competing investment area. Silver and other precious metals followed gold higher.
April gold rose $2 to $396.40 a troy ounce; May silver rose 4.8 cents to $5.455 a troy ounce.