What’s Going On With Wheat?

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Weather conditions for U.S. wheat have not been perfect, but overall they have been beneficial and are forecast to remain that way through the summer.

As a result, the market weather factor for wheat in summer 2010 is bearish.

With world fundamentals extremely bearish, it would take a significant domestic crop loss for wheat to rally, said DTN market analyst John Sanow. But a significant loss potential does not show up in America’s geographically diverse wheat areas, either in crop-condition ratings or forecast details.

As of Sunday June 20, U.S. winter wheat ratings totaled 65 percent good to excellent — 20 percentage points higher than the same week in 2009. Spring wheat ratings were even higher, at 84 percent good to excellent, 7 percentage points higher than a year ago. In the key hard red winter wheat production state of Kansas, the crop had a 57 percent good to excellent rating, while the top spring wheat producer, North Dakota, checked in with a good-to-excellent rating total of 85 percent.

Regarding harvest conditions, Telvent DTN Ag Meteorologist Mike Palmerino said prevailing weather trends are favorable for the various U.S. wheat classes as the season goes on.

“Late spring featured some wet weather in the Southern Plains, and that led to some concern about wheat quality and disease issues,” Palmerino said. “But, we have seen a recent tendency toward warmer and drier weather, and it looks like that trend will catch the Southern Plains through the remainder of June. That should be favorable for harvest in the hard red winter wheat areas.”

For spring wheat, Palmerino is cautiously optimistic.


“We certainly don’t have any soil moisture supply problems in the Northern Plains,” he said. “But, the next issue is whether the spring wheat can dodge disease problems caused by too much rain. That’s going to be the big issue going forward through the rest of the season.”

One area of North America that has had perpetually wet conditions is the Canadian Prairies. Wet weather has already led to acreage loss. The Canadian Wheat Board estimates that 3 million wheat acres in the Prairies will not get planted this year, because of wet weather, and Canada’s wheat production may decline by as much as 22 percent from 2009, because of this acreage loss.

Even with that misfortune for wheat farmers in the Prairies, however, Sanow does not expect a sudden midsummer surge in prices.

“News of Canada’s acreage loss prevented a larger downturn to U.S. wheat prices, as U.S. wheat markets avoided a move through contract lows several weeks ago,” Sanow said.

Weather conditions for U.S. wheat have not been perfect, but overall they have been beneficial and are forecast to remain that way through the summer.

 

Source: DTN AgDayta Edition

Posted by Kaci Switzer

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