February 4, 2023

Eureka News

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Wheat rises as freezing stokes fears of shrinking US crops

Winter wheat climbed higher for a fourth straight day as a deep freeze in the US grain belt escalated concerns about shrinking harvests.

The extreme cold snap puts recently planted wheat at risk of winter dieback, which can occur if the ground is allowed to get cold enough to kill the plant without adequate snow cover. Grains in some key areas are already at the center of concerns about the ongoing drought.

“Cold weather could produce winter kills in US producing areas to make a small crop even smaller,” said Jack Scoville, vice president of Chicago brokerage firm Price Futures Group.

Record cold temperatures are striking as the war between Russia and Ukraine continues to restrict agricultural exports from two of the world’s top grain suppliers. Corn and soybeans in South America are also in focus amid weather concerns in the region, while harvest delays in Brazil and Thailand are driving higher sugar prices. The supply problems raise the prospect of further food inflation in 2023.

The Bloomberg Agriculture Spot Index headed for a third weekly gain on Thursday, with most markets extending gains on Friday. That would be the longest streak of weekly gains since May.

Hard Red winter wheat futures rose for a fourth day in Chicago, the longest such streak since August. The most active futures contract is expected to end the week up 3.6 percent, its biggest jump since late September.

Benchmark Chicago wheat rose a full 2 ​​percent on Friday to $7.7775 a bushel, its highest since December 2. Futures are headed for a second straight week of gains.

Corn and soybeans in Chicago also rose as dry weather and rising temperatures are set to return in Argentina on Sunday, further weighing on crops. Raw sugar climbed higher for a sixth straight trading day on tight global supplies amid slower-than-expected global harvests.