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    US Wheat conditions.

    Looks like 20Percent is awesome and 39 percent is in the crapper.

    The news from the world’s largest wheat exporting country is not very good. With some local exceptions, the stubborn grip of a drought that established itself in Texas four years ago is expanding in the U.S. hard red winter (HRW) wheat production region and now threatens some hard red spring (HRS) wheat areas as well.


    In its “Wheat Beat” blog this week, Kansas Wheat wrote that the state’s 2013/14 wheat crop is likely to be smaller because of dry conditions and planted area that is down 200,000 acres from last year.


    Rain and snow here and there may perk up the dormant crop come spring, but southwestern Kansas wheat farmer Jason Ochs said it will take normal rainfall the rest of this season just to produce an average crop.

    That is because sub-soil moisture is as dry as it has been in 60 years.

    The prime wheat production area of northern and western Oklahoma is also in exceptional to extreme drought, though the severity has diminished recently in southeastern Oklahoma and parts of Texas.


    Unfortunately, long-range forecasts do not anticipate much change and the lack of precipitation expected this winter threatens the Nebraska, Colorado, South Dakota and Wyoming wheat crops.


    USDA estimates that nearly 50 percent of the Nebraska and South Dakota wheat crops are in poor to very poor conditions.


    And a Nebraska climatologist recently said it will take a record-breaking snowfall for the winter wheat crop to have a chance at success — an event that is highly unlikely.


    The forecast does not look promising for spring wheat growers in North Dakota, Minnesota and Montana where dry conditions to the east and south settled in this winter.


    So far, the weather has been more kindly to spring and winter wheat growers in the Pacific Northwest and most of the eastern soft red winter production regions.


    This drought, so reminiscent of the “The Worst Hard Time” of the 1930s, is testing the resolve of many wheat growers.


    Yet winter wheat can endure much hardship and many weeks remain before it is time to seed spring wheat.


    Buyers, like the farmers that grow the wheat, would be wise to plan for challenges and hope for the best.
    Hm

    #2
    It'll be the spring rains that count . .
    .

    There is no correlation between how the
    U.S. wheat crop goes into dormancy and
    how the final yield turns out.

    Globally, there is no shortage of wheat.
    That is why American wheat futures have
    performed poorly.

    Comment


      #3
      For what it is worth, there is carry in KCBT and other wheat futures versus old/new crop inverses in corn and soybeans. About a dime a month in the case of KCBT. To move the market these days, you will have to see a major increase in exports in the real short term.

      Comment


        #4
        Should say a dime between contract months KCBT.

        Comment


          #5
          If they are paying carry, does that mean they are nervous about supplies in the later months?

          Comment


            #6
            Yes. Having said, there are lots of things that also influence final prices including basis and protein spreads.

            Everyone likes to fight about different issues on Agriville but I am really enjoying the new world of wheat marketing. Lots of stuff to learn and new skills to develop.

            Comment


              #7
              Charlie: What protein spreads, I have
              protein at 16 to 17.3%. In a normal
              year I wouldn't get paid for anything
              over 15.5 and this year I won't get paid
              for anything over 13.5% Unless I can
              negotiate a premium in a supposed sea of
              abundant protein I am not going to get
              paid for it. Wish me luck!! I realize
              in the past there were years of thin
              premiums as well but there was usually a
              little premium. Oh well, 60 cent
              nitrogen is cheap.....

              Comment


                #8
                Charliep.

                What do you think about some of US wanting to COOL our wheat crossing the border? Did they not just get told that they could not do that on livestock?

                Comment


                  #9
                  We're awash with protein this year in North America/no premiums for high protein. Next could quite easily be different with large proteins for premium. A new reality. My luck maybe (maybe not yours) would be the year I dropped nitrogen would be the year high protein paid out. A comment from before is that I were to carry something between crop years, it would be high protein wheat.

                  An excellent presentation yesterday at the Alberta Wheat Commission annual general meeting (first one) on opportunities in Asia for Prairie Spring wheat in noodles and red winter (maybe white winter as well - varieties are moving up the registration system) in steamed buns. I suspect the alternative wheats will play a larger role in the new world and will provide a better profit alternative with a improved risk profile versus CWRS in many areas of the prairies. You still have to put the nitrogen on to get yields.

                  Comment


                    #10
                    On the COOL issue, we will have to stay tuned. I will note the hyprocracy (I highlight for good reason in our quality system) of expecting blending privilege in the US and at the same restricting US farmers ability to deliver here.

                    Comment

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