Wheat drops as U.S. crop gets snow cover

Wheat futures declined to the lowest since July in Chicago, extending a three-week decline after a storm brought snow cover in the U.S. Plains for next year’s crop and as import demand slowed.

A winter storm in the U.S. this week dumped heavy snow across the Plains and the Midwest that will protect wheat plants against frost and provide moisture when the snow melts in spring. Most of Kansas, Oklahoma and northern Texas was covered in 0.4 inch to 10 inches (1-25 centimeters) of snow as of yesterday, National Weather Service data show.

“The hard and soft red winter wheat crops could not have had better weather conditions,” economist Dennis Gartman wrote in his daily newsletter. “Many of the nation’s wheat growers have gotten what they’d wanted and needed: snow cover.”

Wheat for March delivery declined as much as 1 percent to $7.67 a bushel on the Chicago Board of Trade, the lowest since July 2, and was at $7.715 by 7:50 a.m. local time. Wheat and soybeans are the best performers on the S&P GSCI Commodity Index this year, both advancing 18 percent.

Milling wheat for delivery in March traded on NYSE Liffe in Paris slumped 2 percent to 249.50 euros ($331.31) a metric ton. Wheat has added 28 percent this year in the French capital.

“Transactions in the physical market logically remain limited due to a limited number of active operators and the closure of many elevators in this year-end period,” Paris-based farm adviser Agritel wrote in a report.

Trading in wheat futures in Chicago was about 23 percent lower than the 30-day average for the time of day, data compiled by Bloomberg show.

U.S. shipments of wheat inspected for export fell 9.1 percent to 15.128 million bushels in the week to Dec. 20, the lowest for the period since 2009, the U.S. Department of Agriculture reported yesterday. Corn-export inspections dropped 18 percent from a week earlier to 13.475 million bushels in the week, the USDA said.

‘Weak’ Performance

“The operators continue to be disappointed by the weak performance of U.S. exports of wheat and corn,” Bourges, France-based farm adviser Offre & Demande Agricole wrote in a market comment.

Corn for March delivery fell as much as 0.5 percent to $6.90 a bushel, and traded at $6.9225 recently, paring gains this year to 7.1 percent.

The amount of soybeans inspected for export jumped 8.3 percent to 44.5 million bushels in the week, according to the USDA. That was above expectations, Dan Cekander, director of grain market analysis at Newedge USA LLC, wrote in a report.

Soybeans for March delivery added as much as 0.8 percent to $14.295 a bushel before trading at $14.2625.

The U.S. Department of Agriculture is scheduled to release its export sales report on Dec. 28 at 8:30 a.m. in Washington.

Bloomberg News

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