Wheat Rises as Unusually Cold Weather May Damage U.S. Crop

Jan. 8 (Bloomberg) -- Wheat rose, erasing an earlier decline, on speculation that unusually cold weather in parts of the U.S. next week will damage dormant plants from Texas to Ohio.

Temperatures may fall as low as minus 15 degrees Fahrenheit (minus 26 degrees Celsius) as far south as southern Kansas from Jan. 13 and last for three days, according to Fred Gesser, a senior global meteorologist for Planalytics Inc. in Wayne, Pennsylvania. A lack of snow to protect dormant plants will increase the risk of damage, Gesser said.

“It’s going to be bitter cold and that is creating fear of crop damage and buying in wheat,” said Tim Hannagan, a grain analyst for Alaron Trading Corp. in Chicago. “You are not going to kill a big portion of the crop, but it will have a major psychological boost.”

Wheat futures for March delivery rose 4.75 cents, or 0.8 percent, to $6.18 a bushel at 12:48 p.m. on the Chicago Board of Trade, after earlier falling to $5.98, the lowest since Jan. 5. Prices plunged 4.7 percent yesterday, the biggest percentage drop since Dec. 4. Wheat yesterday reached $6.4625, the highest for a most-active contract since Oct. 3.

Wheat, which fell to an 18-month low on Dec. 5, is still down 54 percent from a record $13.495 on Feb. 27.

Wheat is the fourth-biggest U.S. crop, valued at a record $13.7 billion in 2007, behind corn, soybeans and hay, government figures show. More...



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