Chicago wheat was up 27 1/4 cents (3.26%) at $8.63.
From ABC News:
Wheat prices rose Wednesday on speculation that a massive storm barreling across much of the U.S. may have damaged the Great Plains crop.
Farmers are worried that subzero temperatures may have seriously hurt the wheat. That comes on top of ongoing worries about a dry winter. The key issue is whether the adverse weather has affected the quality and quantity of the wheat.
"There is an increased idea of possible winter-kill," said Darin Newsom, an analyst with Telvent. "It certainly looks like the market is taking note of that."
The Agriculture Department has said that more than half the crop was in poor-to-fair condition in November when it went dormant. The next report is due in March.
Traders also are concerned about the quality and quantity of the global wheat supply, particularly after devastating floods damaged Australia's crop....MORE
From the Wall Street Journal's Heard on the Street column, from whom I lifted the first half of the headline:
The global wheat market is caught between freezing winds and a sirocco. Prices, up 13% since the start of December, likely will keep rising.
The freeze gripping a swath of the U.S. threatens winter wheat planted in the fall. The problem, believe it or not, is a lack of snow rather than too much. While those on the East Coast trudge through the stuff to work, some Midwestern areas haven't enough.
Winter wheat in the ground ideally has at least 4 inches of snow to insulate it against "winter kill," where freezing temperatures damage the crop, according to Joel Widenor of consultancy Commodity Weather Group. He says most areas of the wheat belt have less than 2 inches of cover now, and he cannot remember such a combination of thin cover and freezing weather in over 15 years. Another mass of cold air is forecast to descend next week.
The timing is bad. The crop already had suffered due to a lack of rainfall. Between late November and Jan. 2, the portion of Kansas's winter wheat crop rated poor or very poor climbed from 25% to 33%, according to the U.S. Department of Agriculture.
Globally, supply had tightened last year due to Russia's drought and export ban. Meanwhile, heavy rains in Australia haven't curbed the size of its wheat output, but have hurt quality. Much of it may be good only for animal feed.
Emmanuel Jayet of Société Générale forecasts a global deficit of 19 million metric tons in the 12 months ending in July, cutting wheat stockpiles by 11%. That would leave stocks still covering 26.5% of demand, higher than the 20.3% that prevailed in 2007-08, when wheat peaked at more than $15 a bushel. With projected inventories relatively more comfortable, therefore, investors should beware of whiplash as weather normalizes....MORE