Huge Winter Storm Threatens Wheat, Cattle

Reuters

A major winter storm sweeping across the U.S. Plains could wreak havoc on agricultural operations, threatening the dormant winter wheat crop, cattle herds and grain deliveries.

The key farm states of Oklahoma, Kansas and Missouri were being hammered Tuesday by what forecasters said could be a record-setting combination of frigid conditions and snowfall of a foot or more in some areas.

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"This is a big storm," said Pat Slattery, spokesman for the National Weather Service central region.

The storm is set to move into the Midwest region later on Tuesday and is forecast to dump up to two feet of snow on Chicago, home of the Chicago Mercantile Exchange and the Chicago Board of Trade.

At the CME, many traders planned to stay downtown Tuesday night. Suitcases and overnight bags were visible in the traders' coat room.

In Oklahoma, 45 mile-per-hour winds and temperatures of 9 degrees Fahrenheit (minus 13 degrees Celsius) and lower were proving dangerous for the state's 5.1 million head of cattle, said Jack Carson, spokesman for the Oklahoma Department of Agriculture Food and Forestry.

Ranchers have been rushing to get their animals to areas with wind breaks and to provide hay and areas where they can access water.

"Hypothermia and dehydration are the two things we worry about," Carson said.

Grain dealers said several merchandising locations through Oklahoma and Kansas were closed down on Tuesday or operating with skeleton crews as heavy, blowing snow and icy conditions overwhelmed the U.S. Plains.

Traders at major grain companies, including agricultural processor and ethanol producer Archer Daniels Midland, Cargill and Gavilon LLC, reported at least some of their operations were affected by the storm.

Fields seeded with winter wheat last fall could be threatened in some areas if they lack a protective snow cover. Frigid conditions can cause winterkill in new plants which lack adequate moisture.

"With these severe temperatures, in areas where the snow is blowing off, you could see some damage there," Carson said.

Any damage to the crop would rally CBOT wheat futures, which are already trading around 29-month highs due to a drought in Russia and rains which damaged the Australian crop.