US winter wheat enters spring in worst shape since 2002

04.04.2018

The extent of the setback to US wheat crops from a harsh winter was underlined by data showing it entering spring at its worst condition in 16 years – with weather threatening continued setbacks.

The US Department of Agriculture, in its first full winter wheat rating since crops entered dormancy last year, pegged 32% of the crop in “good” or “excellent” condition.

That represented a sharp decline from the pre-winter reading, in November, of 50%, and was the lowest rating for a crop heading into spring since 2002, when a 31% figure was recorded.

That was the only time on data going back to 1990 that the US crop has come out of winter in worse condition.

Last year, as of April 2 the figure was 51%.

‘Lowest ratings since 1996-97’

The lowly rating of the current crop reflects in the main the much-discussed drought setback to crops in the southern Plains, a key area for growing hard red winter wheat.

Indeed, ratings for Kansas, Oklahoma and Texas, the top three states for growing winter wheat overall, were all well below year ago levels.

However, the overnight data surprised many investors in showing a further deterioration in the Kansas crop, and no improvement in Oklahoma, despite recent rains.

In Kansas, the proportion of winter wheat rated good or excellent fell 3 points to 10%, with broker Benson Quinn Commodities saying that the state was seeing its “lowest ratings since 1996-97”, and boded ill for production prospects.

“The two other similar years for Kansas resulted in 80% harvested area,” meaning abandonment of 20%, “and yields of 83% of trend”.

‘Saturated fields’

Ratings were also lower year on year for major Midwest states growing soft red winter wheat, the type traded in Chicago, with too much rain, as well as cold temperatures, the issue, although with the crop in major producing state Ohio still showing a decent rating.

“Winter wheat condition was reported at 75% good to excellent despite recent weather concerns,” USDA scouts in Ohio said, while noting “wintry” conditions and “saturated fields”.

In Indiana, where the rating was 10 points lower year on year at 59%, scouts similarly flagged “a week filled with snow, sleet and rain… leaving several fields with standing water”.

Still, although “winter wheat was slow to begin growth due to wet cool weather”, the crop “was reported to be good to excellent condition”.

In Illinois, however, where 21% of state topsoil was seen as holding surplus moisture, the crop reading was, at 46% good or excellent, down 19 points year on year.

Weather outlook

The weather outlook forecasts further tests ahead for winter wheat, with Radiant Solutions saying that across the central US “temperatures are expected to remain well below normal over the next 10 days.

“The cold weather will keep soil temperatures well below normal and will prevent early corn planting and winter wheat growth from making much progress.”

In the southern Midwest and Delta “showers this week will maintain some areas of wetness and will slow fieldwork”.

Meanwhile, in the central and south western Plains, “continued dry weather over the next 10 days will maintain stress on hard red winter wheat in central and western Kansas, western Oklahoma, and western Texas”.

Benson Quinn Commodities said: “The next 10 days to two weeks are expected to remain dry for much of the hard red winter wheat crop.”

Price reaction

At Futures International, Terry Reilly said that “western Kansas, south eastern Colorado and western Oklahoma, including north western Texas, will see minimal rainfall through April 11” adding that the overnight data should be “supportive” to hard red winter wheat futures.

Kansas City hard red winter wheat futures for May stood up 1.5% at $4.74 ½ a bushel in early deals on Tuesday.

Chicago soft red winter wheat futures for May were up 0.9% at $4.50 ¼ a bushel.


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