Tuesday, April 8, 2014

US wheat deteriotates, amid corn sowings fears too

by Agrimoney.com

The condition of US winter wheat deteriorated further, reports from major growing states revealed, as investors await a delayed first national rating of 2014, with early data showing a slow start to corn sowings too.

In Oklahoma, the proportion of the crop rated "good" or "excellent" dropped by two points to 15% in the week to Sunday, affected by drought which has spread to 95% of the state, the US Department of Agriculture said.

"Winter wheat progress continued to be negatively impacted by the prolonged drought and exceedingly windy conditions," USDA scouts said.

"Substantial rain is needed across the entire state, especially in the Panhandle, for winter wheat development."

'Drought conditions'

In Kansas, the top US wheat-growing state, of which 99% is in drought, the proportion of the crop rated "good" or "excellent" fell by three points to 32% in the week to Sunday.

"South west Kansas continued to suffer through drought conditions, including days of high winds," US Department of Agriculture scouts said.

The decline in the rating took it below that last season for the first time this year.

As of early April 2013, the crop in Kansas, then recovering from the national drought the year before, was rated 31%.

Winter decline

The data come as investors are awaiting the USDA's first national winter wheat condition rating of 2014, due after markets close on Tuesday, with the data delayed from Monday for an unspecified reason.

Although ratings in Midwest soft red winter wheat states are expected to be beat those from southern Plains hard red winter wheat-growing states such as Kansas and Oklahoma, the national figure is expected at a relatively weak 35-40% rated good or excellent.

That would well below the 62% in late November as seedlings entered dormancy.

"A 20 percentage-point drop would the biggest during winter dormancy since 2009," US Commodities said.

USDA 'too optimistic'

The lowly ratings have already stoked concerns about this year's harvest.

"The marginal production increase envisaged by the USDA for all wheat types combined in 2014-15 could prove to be too optimistic," Commerzbank said.

And there are only meagre hopes of rains to boost soil moisture levels.

"The best opportunity for moisture in the southern plains remains a window from April 11-13," Brian Henry at Benson Quinn Commodities said, but noted that updated weather models had "reduced some potential totals".

He added: "Forecasts hint at a better precipitation profile for least eastern hard red winter wheat growing regions, but it's slow to develop, if it develops at all."

Corn sowings outlook

Meanwhile, UDSA state data show corn planting has begun at a slow pace thanks to weather setbacks, although this is down to cool and rainy weather in early-starting states, such as Mississippi, where last week enabled only 1.5 days of fieldwork.

Mississippi growers had planted 41% of their corn as of Sunday, compared with an average of 63% by now, while in Arkansas, farmers had sown 25% of their crop, behind an average of 44% by then.

But Louisiana farmers kept sowings on track with the typical rate, with 91% completed, while Texas farmers got 26% of their corn seeded over the week to get their planting programme back on track.

A forecast by Commodity Weather Group of Midwest coldness over the next month "suggests a slow start to 2014 US corn planting and emergence" as sowings hit the Corn Belt, Richard Feltes at broker RJ O'Brien said.

"Nonetheless, May Midwest rains, according to Commodity Weather Group, will be near-normal in most areas - a scenario which would minimise the odds of prolonged planting delays."

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