Hard Red Winter Wheat Crop Receives Disaster Declaration

[fjlip]

Wheat growers in the Southern Plains have know the effects of a drought for about 120 consecutive weeks, and now their neighbors to the north have been added to the drought disaster list. Nearly 600 US counties—20% of them—have been declared disaster areas in the first such USDA designation in 2013. Drought and heat, an environment unsatisfactory for the development of the hard red winter wheat crop, have seriously threatened the vitality of the crop.
"Winter wheat conditions as of November 25 are not as favorable as last year at this time. For all winter wheat seedings, 33% of the crop rated good to excellent compared to 52% a year ago. 26% of the seedings this year are rated poor to very poor compared to 13% a year ago at this time.

"This year’s crop conditions are quite variable by region of the country. Conditions for HRW seedings are not as good as for SRW seedings. For the Central and Southern Plains, the percentage of seedings rated poor to very poor are: Nebraska, 46; Oklahoma, 44; and Texas, 40; and Kansas, 25. South Dakota is even worse, with 64 percent of the crop rated poor to very poor."

[hedgehog]

is it time to lock the bins?

[bucket]

The experts and traders say they have been burnt by the ability of winter wheat to bounce back with some rain.

This may be true but if the crop bounces back or starts in the spring the yield advantage is lost. So you are effectively looking at a spring wheat yield, that is, if it continues to rain.

These are the worst ratings for a winter wheat crop since they started keeping track. That in itself has to say something considering the progress in breeding lines.

Lets say the US drought continues, or even if the winter wheat crop rebounds, where does that leave production data?

Reduced crop if things improve, if not, how does the spring wheat production get affected?

I know its January, but someone must be doing the math on the current soil moisture levels in the US, and at this time, I doubt anyone with an IQ over 20 would be using trend line yields.

[charliep]

For what it is worth, the wheat futures markets are paying some element of carry out into new crop - a sign there is concern in the markets about new crop production.

Will put the MGEX March futures contract up for consideration. May not work as the farms.com charts sometimes don't work. The note is market prices have declined a buck a bushel (not quite that much in the cash market). Slow export pace is the focus today versus concerns about 2013 US HRW crop. Things seem to have bottomed but you have a quite a rally to get things back to where they were in December.

[URL="http://www.farms.com/markets/?page=chart&sym=MWH13"]MGEX March[/URL]

<a href="http://www.farms.com/markets/?page=chart&sym=KEH13">KCBT March</a>

[bucket]

charliep

If the winter wheat crop doesn't rebound and the drought continues, how do the markets ration for an 3-5 month supply delay from somewhere else in the world?

[charliep]

Your arguement isn't with me but rather the market. I suspect it has turned but still early in the game. Reality is we are not that tight on world wheat or North American wheat for old crop. Corn adds a new dynamic but again current prices are doing their job of rationing. The world has moved to other sources of supply other than the US.

Be a speculator if you wish. Just a highlight the market hasn't treated anyone who is long very nicely in the past month. Cash markets (particulary in Canada) have not declined as much as futures - this says something as well.

[charliep]

For what it is worth, the US exports about 10 to 12 MMT of hard red winter. That is just under 10 % of world wheat trade. Pershaps a highlight is that North America is not as important in world wheat trade as we were 20 years ago. We have taken the position of residual supplier to the export market. We should likely be spending more time looking at Europe/FSU.

[BTO_farmall]

In about 5 or 6 Weeks Regrowth of HRWW will begin in The Extreme Southern Parts of The Growing Region, Theys on Borrowed Time. Seen this Comin, Thats Why I went Heavy on Winter Wheat to The Tune of 3000 Acres, End of July gunna be One Hell of a Pay Day!!!!!!!!!!!!! Hallelujah, Its All About The Mula!!!!!!!!!!!!!!!!!!!!

[bucket]

charliep

To be clear, I am NOT arguing with anyone, just asking the question - If the US drought continues where do endusers go for product if the US isn't in the market and how does that impact world ending stocks down the road?

The comment about experts and traders being burnt is just something I read that the US winter wheat crops have recovered other times, I am not sure this time this will happen considering current soil moisture levels and the 10 day forecast for the US plains.

Just asking questions to gain more insight from other sources like yourself, not meant to be argumentative.

[bucket]

Global weather systems have definitely shifted short term.

I would say it has something to do with destroying the rain forests in South America to be turned into farmland. Idiotic, sure but the tree huggers in Canada can't go to South America to bitch about it, because , quite frankly they will disappear forever.

It easier to complain about the oilsands in a free speech country like Canada than go to a more lawless society in South America and find the real problems being created in the Earth's weather patterns.