Wheat Futures Rise behind U.S. Cold Snap and Import Demands
U.S. wheat futures are on the rise due to freezing temperatures in the Great Plains and strong import demand
According to a recent Bloomberg news article, wheat futures rose from a three-week low as freezing temperatures across the Midwest pose a threat to the world’s largest wheat producer and import demands remain steady.
Wheat for delivery in March added 0.2 percent to $6.52 a bushel by 7:44 a.m. on the Chicago Board of Trade, much in part due to some winter-kill damage to wheat in parts of the Great Plains. Temperatures in northwest Kansas and southwest Nebraska recently dipped below zero degrees and cold weather forecasts in the next six to 15 days could pose additional threats to the crop, according to the article.
Don Keeney, a meteorologist for MDA Weather Services, explains in an AgProfessional article that sub-zero temperatures in the near future could further threaten the hard winter red wheat region, and a lack of snow cover could lead to winter-kill. Despite these concerns, "most other areas should have a snow cover and that should protect the crop," he said.
Wheat futures also rose this week due to expected strong international imports. In a separate Bloomberg article, analysts Kona Haque and Chris Gadd at Macquarie Group Ltd. say the import demand for wheat is still strong. “The hard-red winter markets should see resurgent demand from South America in coming months. We advocate being long U.S. hard-red winter wheat at the present,” they said.
As freezing temperatures sweep across much of the Midwest and import demands remain strong, U.S. wheat futures have risen according to these sources.