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As frigid temperatures spread across a wide swath of the United States as far south as Florida and the Gulf coast of Texas, commodity trading has turned more volatile. Spot natural gas prices have jumped in New York, while orange juice futures have shot up. This was predictable – bitter cold drives up energy consumption, and fears that as much as 15 per cent of Florida's citrus crop could be lost did the trick for the OJ bettors.

But natural gas and juice are not the way to play the Great Winter Freeze. After soaring more than 20 per cent since the start of November, natural gas futures barely moved at all Monday. Which indicates that the current cold snap was already priced in and that no shortages of supply loom on the horizon. Indeed, thanks to the fracking revolution, the U.S. still has far more of the stuff than it can use, even if the record low temperatures persist in stymieing production for a while.

"Whatever gains we've seen in the last month are because of the [weather] forecasts for what's happening now," says veteran California-based commodities analyst Ron Lawson, co-founder of Logic Advisors.

One consolation for the deep cold is that, if the frost penetrates the soil to a depth of at least five centimetres, it will kill off the majority of the pests that farmers would normally have to spend considerable resources controlling during planting season. Such a frost could reduce their costs by up to 10 per cent.

As for oranges, when prices get too high, juice producers solve the problem by bringing in more concentrate from Brazil.

So where should chilled commodity investors be directing their attention? The answer is wheat, which has posted its biggest increase in nearly three months. That may surprise Canadians, because growers north of the border rarely suffer winter wheat woes.

"In a perfect planting world, the snow cover acts as an insulator," even in extreme cold, Mr. Lawson notes. That cover is keeping the Canadian crop safe. But the U.S. southern plains haven't been wet enough to provide the same protection, and the U.S. grains aren't as hardy to begin with.

"In the U.S. they have different [wheat] varieties than we do, ones which are not as cold tolerant. So with the cold weather in the States now, they are concerned with winter kill," says Gary Stanford, president of the Grain Growers of Canada. U.S. agriculture officials are bracing for major damage to crops this week in Nebraska and parts of Kansas.

Add in a lengthy crop-killing drought and extreme heat in Australia, which cuts deeply into global supply, and you have a recipe for stronger prices. The upshot is that wheat has far more potential for price gains in both the short- and long-term than natural gas, citrus or other weather-sensitive commodities.

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