By Karen Braun
FORT COLLINS, Colo., Nov 2 (Reuters) – Wheat traders do not usually worry too much about the health of U.S. winter wheat this time of year as spring rainfall following the break from winter dormancy is a primary factor for yields.
But the combination of historically poor crop conditions and sky-high global wheat prices might be enough to add the U.S. crop to their watch list.
U.S. and European wheat futures set contract and multiyear highs again on Tuesday, and top exporters like the United States will be under pressure to produce healthy harvests next year to ease concerns around global food security.
The U.S. Department of Agriculture’s statistics service designated 45% of the winter wheat crop in good or excellent shape as of Sunday, the fourth-worst score for the week since records began in 1986. The 21% poor-to-very-poor rating is the highest ever for the date. (https://tmsnrt.rs/3nUtn7O) (https://tmsnrt.rs/3q4jhE7)
Conditions are among the worst in the northwestern wheat belt, which has been gripped by drought this year. Good-to-excellent scores in Montana, Washington and Oregon are 59, 38 and 48 percentage points below the recent five-year average for the date. Those states account for 19% of winter output. (https://tmsnrt.rs/3bAYAao)
Texas and Colorado, totaling 11% of production, are also struggling. Just 17% of winter wheat in Texas is good or excellent, some 24 points below average. Colorado’s wheat is 12 points off normal.
Top grower Kansas is a bright spot for the crop, where 62% of wheat is good or excellent, some 14 percentage points above the recent average. The Plains state is responsible for 26% of U.S. winter wheat. Neighboring Oklahoma grows 8% and its wheat is also doing better than normal.
Chicago wheat futures Wv1 on Tuesday marked another high of $8.07 per bushel, the most-active contract’s best since December 2012. Futures closed lower at $7.91-1/2 per bushel, though that is 30% stronger than on the same date a year ago.
PAST YEARS
It is still early in the game as just two-thirds of the U.S. crop had emerged as of Sunday, close to normal, though final outcomes were mostly unimpressive in years with similar ratings at this stage.
A year ago, just 43% of winter wheat was good or excellent, the second-worst for the date after 2012’s 40%. The crop was just 44% good or excellent in the same week in 1991, and it scored 46% in 2010 and 2011.
Final yields in those five comparable years were all between 2% and 4% below the long-term trend. The worst years, like 2014 and 2015, had decent ratings in the fall, but extremely dry spring weather tanked those yields.
Nationally, the crop was 48% good or excellent by the end of April 2021 versus a five-year average of 53%. Usually by that time about a third of the wheat is headed and entering the critical yield period.
Total 2021 U.S. wheat output was weighed down by the worst spring wheat harvest in more than three decades. But it was winter wheat that pulled the final shocker, coming in at the end of September more than 40 million bushels off the previous forecast, which was not expected.
The shaky start to this season means that the wheat must avoid extreme cold during the winter and receive plentiful rainfall in the spring. Recent climate outlooks suggest most of the United States is likely to be warmer than normal through at least January.
Heavier plantings could help offset some potential yield limitations this year. Many analysts believe strong profitability has caused U.S. farmers to increase winter wheat acres for the 2022 harvest, possibly to at least six-year highs.
USDA’s first winter wheat area survey for the 2022 harvest will be published Jan. 12.
Graphic- U.S. winter wheat conditions Oct. 31, good/excellenthttps://tmsnrt.rs/3nUtn7O
Graphic- U.S. winter wheat conditions Oct. 31, poor/very poorhttps://tmsnrt.rs/3q4jhE7
Graphic- U.S. winter wheat conditions by statehttps://tmsnrt.rs/3bAYAao
(Editing by Matthew Lewis)
(([email protected]; Twitter: @kannbwx))
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