CBOT Wheat Futures Up More Than 5% On Freezing U.S Weather 04/09/2007 -- 01:26
SINGAPORE (Dow Jones)--Freezing weather in U.S. wheat growing regions is pushing up wheat futures on Chicago Board of Trade, as traders fear it might damage the developing wheat crop.
While CBOT was closed Friday for the Easter weekend, May wheat futures traded on CBOT's electronic platform have risen by 23 cents to $4.68/bushel as of 0500 GMT Monday, up more than 5% from the U.S. trading session close Thursday.
Information on the developing freeze in wheat growing areas remains sketchy still, but private forecaster T-Storm Weather over the weekend said freezing conditions continued in Oklahoma, Texas Panhandle, Kansas and parts of Arkansas most of Saturday.
U.S' National Weather Service has put several parts in wheat growing states Oklahoma, Arkansas, Kansas, Illinois, Ohio and Missouri under freeze watch until Monday morning, when the next update will likely be available.
"A freeze warning means freezing temperatures are imminent or highly likely. These conditions could kill plants and other tender vegetation," the National Weather Service website said.
According to a U.S. Department of Agriculture report Friday, crops most vulnerable to cold weather include corn across the South, winter wheat from the central and southern plains into the Southeast, and blooming fruit trees in the South.
Another report by the Kansas State Research and Extension on Friday said that while a hard freeze in April is not a problem for wheat crop normally, this year it's different because the wheat crop is two weeks ahead of normal development in most of the U.S.
"That means that some fields may be more vulnerable to freeze damage than they normally would be," said the report. Actual damage to crop will depend not only on how low the temperature fall, but also on how long it lasts, it said.
According to commodity broker AgResource, this is the coldest early April weather since the 1960s, while the US wheat crop is on average 10-15 days ahead in maturity than in usual years.
AgResource said any damage to the wheat crop could help support both wheat and corn futures, as corn demand for feed purposes in the coming months will rise if the wheat crop shrinks.
However, A G Edwards, another commodity broking firm, noted in a report that a similar early April cold outbreak in 1997 didn't cut wheat yield but rather led to a better-than-expected harvest.
