US winter wheat gets off to worst start since 2002

Winter wheat seedlings in the US have got off to their worst start since 2002 thanks to the drought which has set back many states, giving parts of Oklahoma their driest March on record.

The US Department of Agriculture, in its first assessment of how the domestic crop made it through the winter, pegged 37% in "good" or "excellent" condition.

The rating, which was marginally below market forecasts of 38-42% that Agrimoney.com heard, compared with 65% last year, and was the weakest starting figure since 2002, when only 31% of the crop was rated in the top two bands.

The data highlighted the differing fortunes of the states growing soft red winter wheat, which have received ample moisture, and the parched hard red winter wheat belt.

In Illinois, a major soft red winter wheat state, 55% of the crop was good or excellent, compared with 31% in Kansas, the main grower of hard red winter, a higher protein variety typically used in foods such as bread rather than cakes and biscuits.

"There was light precipitation across most of the wheat acreage in Kansas last week, though not enough to improve the condition of the crop," USDA officials said.

'Driest on record'

In other hard red winter states, only 12% of the Texan crop was rated good or excellent, while in Oklahoma, 16% made the top two condition bands, down five points from the figure identified in a state report a week ago.

"Another dry and windy week in Oklahoma means continued concerns about the potential of the wheat crop, as well as planting row crops into dry soil," the USDA said, quoting an official estimate that 92% of the state is in drought.

"For the period since March 1, the Southeast and South Central districts are the driest on record, since 1921, and the Southwest is having the second driest such period."

Indeed, there is a "high" risk of bush fires, with "multiple fires reported across Oklahoma last week", the officials added, also noting that temperatures reached 100 degrees Fahrenheit on Sunday.

Charge signals

The weak condition of the crop has been attributed, in part, with supporting wheat prices, notably in Kansas, where the hard red winter variety is traded.

"Wheat continues to rally on corn's coat-tails. However worsening US crop weather is also providing internal support to the wheat market," Luke Mathews at Commonwealth Bank of Australia said.

In Minneapolis, Benson Quinn Commodities noted the growing premium of Kansas wheat, which rallied 41.5 cents on Monday, over Chicago wheat, of the soft red winter variety, which added 30.5 cents.

"Since the mid-March low, Kansas City May wheat has rallied almost $2 a bushel!" Benson Quinn analyst Dave Lehl wrote in a report.

"Charts are pointing to a test of the February highs, which are around $10.00 a bushel on either the May or the weekly continuation chart."

'Windows blown out'

He added: "Persistent dry conditions threatening the hard red winter wheat crop in the southwestern plains were compounded this weekend with the addition of warmer than normal temperatures and high winds."

The winds, so large that "I heard one story of it blowing the windows out of a car", were "just not making life any better for the hard red winter crop".

(Source: http://www.agrimoney.com/news/us-winter-wheat-gets-off-to-worst-start-since-2002--3006.html)