(Agrimoney) – The US winter wheat crop made a far worse-than-expected start, undermined by dryness in many areas – although brokers warned against reading too much into the data early in the growing season.
The proportion of US winter wheat rated in “good” or “excellent” condition as of Sunday was put by the US Department of Agriculture in its first reading for the crop at 47% – well below the figure of 55% that investors were expecting.
“This was a surprise to us,” said Terry Reilly at Chicago broker Futures International.
The number was also below the average reading for the time of year, calculated by brokers at 50%, and reflected dryness in major states for growing all three of the top winter wheat types.
Dryness worries
For white wheat, whose troubles against dryness in its key Pacific North West growing area Agrimoney.com highlighted last week, the proportion of crop rated “good” or “excellent” in Oregon came in at just 8%.
This was despite some rain over the week in most areas, “aiding germination of fall-plated crops,” USDA scouts in the state said.
In fact, all of the state remains in “severe” drought, according to official data.
Meanwhile, in the Midwest soft red winter wheat growing area, while crops in Illinois and Ohio got off to good starts, those in the likes of Missouri and Arkansas suffered from the growth of dryness in the region.
In Missouri, 24% of the state was rated in drought as of last week, a rise of 15 points week on week, while in Arkansas the proportion rose by 11 points to 60%.
‘Drought continued to expand’
And, among areas growing hard red winter wheat, the most popular wheat type, just 31% of Oklahoma wheat was rated good or excellent.
“Despite heavy rain during the latter part of the week in the Panhandle, Southeast, and South Central areas [of Oklahoma], dry weather was prevalent throughout the state for much of the week,” USDA scouts said.
“The drought continued to expand.”
A relatively low reading of 41% was recorded for Kansas, the top wheat-growing state, with Colorado winter wheat rated at 38% good-or-excellent.
‘Won’t necessarily translate’
Nonetheless, many traders urged caution into reading too much in the data so early in the growing season, with some 17% of plantings yet to be completed.
“Poor winter wheat conditions reported during the fall won’t necessarily translate to below trend yields in the spring,” Mr Reilly said.
At Benson Quinn Commodities, Brian Henry said that “fall ratings don’t typically correlate with overall production”.
Much depends on the severity of the winter, with even poorly-established crop able to avoid significant winterkill if temperatures do not get too cold.
Weather outlook
And at RJ O’Brien, Richard Feltes flagged the prospect of a boost to crops from rainfall in some areas over the weekend, and with more in the forecast.
“I suspect the winter wheat rating… will advance next week following last week’s precipitation and more forecasted for Oklahoma in the coming week,” he said.
In the southern Plains, “the next rain event is expected to develop late Thursday night and Friday, with Friday and Saturday wettest with 0.40-1.35 inches, locally up to 2.00 inches”, World Weather said.
Rival weather service MDA said that in the Plains “showers in far south-eastern areas this past weekend improved moisture for wheat, and some additional minor improvements are expected in southern areas later this week”.
However, “more rainfall will still be needed in east central Kansas and eastern Nebraska to ease dryness and stress there”.
