U.S. wheat futures rose on December 24 due to a combination of freezing temperatures in Russia that may be damaging the country's winter wheat crop and three weeks of futures declines that have made U.S. wheat more competitive, according to reports.
Wheat for March delivery advanced as much as 0.5 percent to $7.9625 a bushel on the Chicago Board of Trade. “In Russia, the extremely cold temperatures could have caused some frost damage in the regions with a lack of snow cover, such as those in the south of the country,” said Paris-based farm adviser Agritel. The Volga region in Russia, which has reached temperatures of -15 Fahrenheit, accounts for 26 percent of Russia's wheat production. The Southern District region accounts for another 28 percent.
Chicago wheat futures fell 2.7 percent the third week in December and have dropped 8.1 percent in December overall, on track for the biggest monthly slide since September 2011, according to reports. Wheat in Chicago has still gained 22 percent in 2012, however, the best performance on the Standard & Poor’s GSCI Index of 24 commodities in 2012, as drought in Russia and Ukraine reduced export supplies.
“U.S. wheat prices are extremely competitive and increasing export sales activity is likely to develop and buying interest is likely to shift to the U.S.,” said Duane Lowry, publisher of Early Market News.