(Bloomberg) – Corn futures rose to a 16-week high on speculation that frigid U.S. weather will prompt ranchers to use more grain in livestock feed. Wheat jumped the most since April as the winter blast threatens crops.
An arctic air mass will bring temperatures as much as 40 degrees below normal in the northern and central U.S. this week, according to the National Weather Service. Animals will need to use more energy to stay warm in cold weather, prompting ranchers to increase feed rations.
“Typically, there’s more feed usage and less field grazing,” as temperatures fall, Helen Pound, a senior commodity specialist at KCG Futures in Minneapolis, said in a telephone interview. “The animals need more calories, and that should support more feed needs.”
Corn futures for December delivery rose 1.1 percent to close at $3.7775 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price reached $3.85, the highest for a most-active contract since July 18.
The U.S. Department of Agriculture on Nov. 10 lowered its estimate for the domestic crop by 0.5 percent to 14.407 billion bushels. Stockpiles will be 3.5 percent smaller than the October forecast.
Wheat futures for delivery in December jumped 3.3 percent to $5.4275 a bushel, the biggest gain since April 15. The price reached $5.4575, the highest since Sept. 3.
The U.S. “cold pattern will push winter wheat into dormancy across much of the Plains and Midwest, stalling any planting that has not been completed,” MDA Weather Services in Gaithersburg, Maryland, said yesterday in a report. “Major losses are not anticipated, but some spotty damage will be likely.”
Wheat trading tripled compared with the 100-day average, while corn more than doubled, according to data compiled by Bloomberg.
Soybean futures for January delivery dropped 1.5 percent to $10.4775 a bushel. Earlier, the price rose as much as 2.1 percent to $10.8625, the highest since Aug. 11.
