Aussie Floods, Icy Outlook For US Midwest Push Wheat Prices Steadily Higher - Bloomberg

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Wheat rose to the highest in almost five months as floods may hamper grain shipments in Australia and cold temperatures threatened U.S. crops. Rice gained. In the Australian state of Queensland, floods spread across an area the size of France and Germany, swamping roads. In the southern U.S. Great Plains and central Midwest, “intense cold” in the next 11 to 15 days “poses a 50 percent risk of damage” for winter crops, according to Commodity Weather Group. Parts of Kansas and Oklahoma had less than half of normal rainfall in the past 30 days, according to the National Weather Service.

“There may be some logistics issues with moving wheat” in Queensland, where the harvest “is pretty much completed,” said Jim Hemminger, a risk-management specialist at Top Third Ag Marketing in Chicago. In the U.S., “the extended weather maps are showing some very cold temperatures coming in the southern Plains, so there may be a concern about winter kill.”

Wheat futures for March delivery rose 23 cents, or 2.9 percent, to $8.1725 a bushel at 12:18 p.m. on the Chicago Board of Trade. Earlier, the price touched $8.25, the highest for a most-active contract since Aug. 6. The commodity climbed 47 percent last year, the first gain since 2007, as adverse weather cut production in Russia and threatened crops in Australia and the U.S., the world’s top exporter.

Temperatures in soft-red wheat areas in the U.S. Midwest may range from zero degrees to 10 degrees Fahrenheit (minus 12 Celsius) by Jan. 8, with little snow cover to protect the crop, said Allen Motew, the director of QT Weather in Chicago. Storms starting Jan. 9 may bring as much as 6 inches of snow to the Great Plains, while temperatures will fall below zero degrees, he said.

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http://www.bloomberg.com/news/2011-01-03/wheat-rises-to-five-month-high-as-australia-flood-u-s-cold-threaten-crop.html