US winter wheat deteriorates, opening up soft-hard divide

22.11.2017

The condition of the US winter wheat crop deteriorated further, taking it to a below-average rating, amid dryness testing in particular hard red winter wheat areas, expanding their divide to soft red states.

The US Department of Agriculture, in a much-watched weekly briefing, lowered by 2 points to 52% its rating of the proportion of US winter wheat rated “good” or “excellent”, undercutting market expectations of an unchanged reading.

The downgrade took the rating well below the 58% figure recorded a year ago, and a five-year average of 54%, on Agrimoney calculations.

And it reflected further deterioration in many Plains states growing hard red winter wheat, affected by drought, contrasting with improvement in some Midwest areas producing the soft red winter wheat traded in Chicago.

‘Dry weather prevalent’

In the Plains, the rating for Nebraska winter wheat dropped by 7 points to 56%, in a week which USDA scouts said was marked by “limited” rainfall and temperatures which in western areas averaged 6-7 degrees Fahrenheit above normal.

In Oklahoma, the second biggest winter wheat growing state, the rating fell 4 points to 37%

“Dry weather continued to be prevalent throughout the state,” USDA scouts said, adding that “drought conditions continued to expand.

“It has been 48 days since the western panhandle has seen at least a quarter-inch of rain in a single day.”

In Montana, the rating dropped 3 points to 36% of winter wheat seen as good or excellent, amid dryness which has left 42% of topsoil “short” or “very short” of moisture, up from 28% a year ago.

‘Progressing well’

By contrast, in the soft red winter wheat-growing region, Arakansas saw its winter wheat rating rise by 8 points to 61%.

In Illinois, the reading improved by 7 points to 61%, in a week marked by above-averaged rainfall, and with just 8% of topsoil deemed short of moisture.

Although the reading for Ohio, the top soft red winter wheat growing state, did drop by 2 points week on week, it showed an elevated rating of 86% nonetheless.

“Winter wheat is progressing well and the condition remains good to excellent,” USDA scouts said.

Price gap

Kansas City hard red winter wheat futures could only marginally reduce their premium to Chicago soft red winter wheat futures in early deals on Tuesday.

Kansas City wheat for December stood up 0.1% at $4.16 ¼ a bushel, while Chicago’s December lot was unchanged at $4.22 a bushel.

While Kansas City wheat, boasting a higher protein level, would typically see higher prices, values have been undermined by the extent of supplies still left over from the bumper 2016 harvest.


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