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Kansas wheat breaking dormancy early/frost damage potential

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    Kansas wheat breaking dormancy early/frost damage potential

    weather

    Mary Lou Peter-Blecha
    K-State Research & Extension News

    2/15/2006, 10:49 AM CST




    Construction crews, kids at recess ... anyone who spends time outdoors has likely enjoyed this winter's mild weather, but wheat growers should be wary, a Kansas State University agronomist said.

    "Wheat in many areas greened up in January and can no longer be considered dormant," said Jim Shroyer, agronomy state leader with K-State Research and Extension. "Some growth may be taking place, especially where moisture conditions are good and daytime highs have been in the 60s or 70s."

    That may make wheat look good for this time of year, but it would be much better if temperatures were colder, Shroyer said. For several reasons, record-high temperatures in winter are not good for wheat.

    Plants growing at this time of year use valuable soil moisture. Where topsoil is dry, this puts added stress on wheat plants. Even where topsoil moisture is adequate, it would be better used later in the growing season.

    In addition, plants will have lost some of their winter-hardiness, he said. This won't be a problem if the weather never turns extremely cold again this winter or if temperatures cool down gradually, so the plants can regain some of their winter-hardiness. If the wheat is green and growing, however, and temperatures suddenly go from unusually warm to extremely cold, either winterkill or spring freeze injury could occur.

    The fact that temperatures in early February were somewhat cooler than in January may help wheat regain some of its winter-hardiness, the agronomist said.

    Finally, warm weather in January and February could spark insect and disease problems earlier than normal. Army cutworms are sometimes a problem in wheat fields during February and March. Other early-spring insects to watch include winter grain mites and greenbugs, Shroyer said. Early-season diseases include powdery mildew and tan spot.

    "One factor that is not a concern is vernalization," the agronomist said. "The vernalization requirement of winter wheat is more of a cool' requirement than a cold' requirement. Varieties have different vernalization requirements, but so long as there are three to five weeks in which the air temperature is below 48 degrees, that's enough to vernalize any of the current winter wheat varieties commonly grown in Kansas. We've already had that."

    Shroyer said that during warm winters, producers often ask whether the wheat will start jointing in February.

    "That's unlikely, but possible," he said. "I don't know of any wheat that has jointed yet in Kansas. But if temperatures remain warm, some of the earliest varieties, such as Jagger, could start jointing early. Wheat that joints early is more vulnerable to spring freeze injury."

    Shroyer is suggesting that producers watch their wheat crops for insects, diseases, and the weather in February and March. The longer temperatures remain above normal, the less winter-hardiness wheat will have and the more susceptible it will be to a sudden temperature drop to the single digits or below.

    #2
    NATIONAL WEATHER SERVICE GOODLAND KS
    1000 AM CST FRI FEB 17 2006

    NOTE: "FAIR" INDICATES FEW OR NO CLOUDS BELOW 12,000 FEET WITH NO
    SIGNIFICANT WEATHER AND/OR OBSTRUCTIONS TO VISIBILITY.

    KSZ061>065-074>080-084>089-171700-
    SOUTHWEST KANSAS

    CITY SKY/WX TMP DP RH WIND PRES REMARKS
    DODGE CITY LGT SNOW 14 7 73 NE14 30.60S WCI -1
    ELKHART N/A 14 2 59 E13 N/A WCI 0
    GARDEN CITY LGT SNOW 14 8 77 E17 30.55F WCI -3
    GREAT BEND CLOUDY 9 -6 52 NE17G26 30.68R WCI -10
    LIBERAL MOSUNNY 18 7 62 E15 30.54F WCI 3
    PRATT CLOUDY 18 9 68 NE14 30.66R WCI 4

    Comment


      #3
      above post may be hard to understand. Current temps at 10 am in Kansas are between 10 and 20 F. Some potential to damage the wheat crops.

      Comment


        #4
        Kansas City Board of Trade Futures
        As of 10:50 am

        WHEAT: Price Change
        Mar 06 4.29 b up 3 1/2
        May 06 4.33 1/2 a up 4
        Jul 06 4.30 1/2 a up 5
        Sep 06 4.35 up 6
        Dec 06 4.40 1/4 up 4

        Comment


          #5
          Understand I'm not trying to pour cold water on the only positive market news we've had for some time, but I hope prairie wheat producers won't get too bullish on this recent wheat rally.

          Yes the drought in parts of Texas, Arkansas and Oklahoma and the potential of forecast cold temperatures have helped move the market up as have expected low 05-06 HRW carryover stocks and the possibility of new Iraqi wheat purchases. However, the biggest part of the rally can be laid at the feet of the funds who have been very strong buyers of KC wheat and to a lesser extent Minneapolis wheat. We'll need a continued feeding of bullish news to maintain the rally.

          Historically over the past 20 years, nearby Minnie wheat futures has rarely traded over US$4.25/bu. In addition there is very nice premium of Dec 06 futures at $4.30 compared over Mar 06 at $4.10.

          So, are prairie farmers doing anything to take advantage of this rally for '06 crops? Not much they can do if they don't have a futures account (except get an account up and running as soon as possible) if they understand futures trading. With a futures account, hedging a small amount of new-crop wheat at current prices would, in my opinion, be a good risk management strategy. If prices rally some more, add to that hedge and, if possible, seed more acres.

          Contract size in Minnie or KC is 5000 bushels.

          Any other strategy suggestions?

          Comment


            #6
            I agree with your thoughts Lee about the fund involvement. Really I am just trying to get some discussion going both with the action in the wheat market and with the upcoming release of the FEB pros followed shortly by the first look at the basis and ability to do something on new crop.
            I note that on Feb 28th 2005 the fixed price was 192.67 for cwrs
            right now we are looking at in that 177 range so we're not back where we were even a year agao however the dollar is also a factor here.
            At least theres something to be interested in. So thats one good thing.

            Comment


              #7
              JD4ME, thanks for helping Charlie and I get some different discussion going. Believe me, we appreciate the help. Keepa goin'

              LM

              Comment


                #8
                Can someone explain why the board has to wait till feb 28,why can't they offer fixed price contracts sooner? or basis?

                Comment


                  #9
                  My understanding is that for the 07 crop, the Board will begin offering an opportunity to lock-in the U.S. wheat futures price in the fall of '06. For the '07 crop, basis contract and no fixed price available until Feb 07. My guess is that they'll argue that the basis risk is too big to offer fixed price and basis opportunities any earlier.

                  I know that doesn't help much for this year. That's why I like to see producers understand hedging and have a futures trading account in place just in case they need it.

                  Comment


                    #10
                    Okay let's say I take out a hedging account and sell a contract on the mpls exchange,would I turn around and buy a call option at the strike price at the same time, of where I sold at in order to protect myself against margin calls should the market go against me.Or will this call option be to much money? Melvill

                    Comment


                      #11
                      I think I said it in one of the other threads. I'd be temped to sell U.S. wheat futures - Minnie of K.C. - as a hedge for, say, 20 to 25% of my expected crop. If U.S. futures keep going up I'd sell more and, if I could, I'd seed more. Quite frankly, I wouldn't be seriously worried about margin calls at this point. You may get some but if you were to buy back the futures (lift your hedge) and sell U.S. wheat futures, in Canuck Bucks, through the CWB basis contract program, you wouldn't be holding those futures very long anyway.

                      One other thing. Margin calls aren't lost money. Yes, they are a cash flow issue but any producer who doesn't want to ever experience any margin calls, should never have a futures account.

                      I suppose you could buy a call to cover margin calls but, gee, to buy (pay for) insurance to cover margin calls, I'm not keen on it.

                      Comment


                        #12
                        Lee,

                        Buying an out of the money put... solves the problem.

                        No margin calls. Hedge that can be held short term... at a low cost.

                        I did what you are talking about in 1996... but sold call options to pay for my puts.


                        Was mighty stressful... I wouldn't doubt the ten year cycle is right on track!

                        Comment


                          #13
                          tom4cwb, I don't disagree with you that an out-of-the-money put will help protect against some of the possible slide downward of U.S. wheat futures. They work pretty well if held for a short time before the time value erodes. Put options only protect against part of the downward slide. Some of my farmer-clients don't like them for that reason.

                          I also am sympathetic with the potential stress of sell calls to cover part of the cost of the puts. Sometimes I think brokers encourage people to buy the call at a strike price that is too close to the strike price of the put they're buying.

                          Comment

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