Rain soaks US wheat country, batters futures

While late April rains weren’t as widespread as some hard winter wheat farmers hoped, recent precipitation set up the central Kansas crop for good yields and offered a lifeline to the drought-stressed western Kansas crop. The dose of much needed rain improved crop conditions by April 27 in Kansas and across the primary production region, but helped pressure wheat futures to contract lows.

The US Department of Agriculture rated the condition of the Kansas winter wheat crop in the week ended April 27 at 7% excellent, 40% good, 36% fair, 13% poor and 4% very poor. That marked an improvement from 41% good-to-excellent a week earlier.

Wheat was improved around the horn of the other top wheat production states as well. Good-to-excellent conditions by the same date were 44% in Oklahoma (39% a week earlier), 31% in Texas (27%), 33% in Nebraska (30%), 17% in South Dakota (14%) and 70% in Montana (65%). No wheat was rated excellent in South Dakota, the hard red winter wheat state with the most area in drought.

Rains over the dry Plains in the fourth week of April covered the entirety of US winter wheat production. Rainfall totals measured between ½ inch and 8 inches from the Canadian border to central Texas. But some areas received nearly 16 times as much rain as others. The heaviest precipitation pocket spanned western Oklahoma and the eastern Panhandle of Texas, where some areas received as much as 12 inches of rain. Totals from 2 to 4 inches covered all of dry South Dakota, with as much as 8 inches received in the west-central part of the state. In Kansas, most of wheat country received at least 1 inch of rain, most places more. A large area of Northwest Kansas got 4 to 8 inches. But the southeast quadrant and western corners of the state received between ¼ and 1 inch.

“Areas of northwest and southwest Kansas unfortunately didn’t get some of the big rain that they got in west-central and some of the central part of the state,” said Justin Gilpin, chief executive officer of Kansas Wheat. “For the areas that did get it, rain was certainly beneficial. For those areas that got more of a limited amount, rain came at a time when the crop was pretty stressed and extended it for a while. What’s going to determine what happens from this point forward is whether or not we keep getting moderate temperatures, don’t see 100° days with a lot of wind and have some more timely rains. With wheat, it’s not the amount of rain that you receive, it’s the timing of that rain. If we can get some in the next couple weeks when the crop tries to finish out, I think it would definitely be beneficial.”

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Temperatures and conditions in May will not only play a role in crop size, they also will help determine the timing of the harvest. In Kansas Wheat Board meetings this week, most producers noted their crop was about 10 days ahead of the average pace. The USDA said Kansas winter wheat by April 27 was 78% jointed (near 82% last year but ahead of 66% as the five-year average) and 19% headed (29% and 10%). Colorado wheat by the same date was 44% jointed versus 36% as the average.

“These producers said they felt like their crop is a little ahead of normal pace,” Gilpin said. “Depending on what happens in the next month, if average temperatures heat up quickly in the later part of May, they might have an earlier harvest. But if weather stays around 70 degrees (F) for the whole month of May, obviously that wouldn’t happen.”

While recent plentiful rain has boosted soil moisture profiles and winter wheat conditions in Oklahoma and Texas, precipitation may have been too late for parts of the dry crop as wheat plants may have passed the development phase where the potential number of kernels is set.

“In southwest Oklahoma and parts of Texas where that crop had been pretty stressed, even though they got pretty good rain, it’s not going to help that crop that was already too far along to really benefit as much from it,” Gilpin said. “When you think about that particular area, I think wheat plants were pretty much already set before the rain. As a result, they’ve definitely already lost the top end (of yield and production potential).”

Thus far, potential crop pressure from pests and disease has been minimal beyond reports of leaf rust in the far southern Plains.

“Oklahoma State University has put out some information about leaf rust starting to show up, but it may be a little too late to apply fungicide down there,” Gilpin said. “To apply a fungicide, a farmer needs about six weeks before harvest and they’re probably three or four weeks away from harvesting. We are seeing some applications in southcentral Kansas, annual spring fungicides as preparedness for any rust that may be moving up from Texas or Oklahoma but then also to give some protection against and to mitigate potential risk of scab because of the rains coming when the crop is nearing flowering stage.”

Wheat futures accelerated a downward slide after a rainy April 25-27 weekend across the Plains, Midwest and in the Central states, where moisture has been so plentiful that some soft winter wheat fields may have been ruined by flooding along the lower Ohio River Valley. Most futures struck fresh contract lows in successive days April 28 and 29.

Basis premiums have been under pressure from ample supplies amid a stagnant export market, although spot wheat sales to Mexico and to the Texas Gulf for export did pick up slightly in late April. Railroad performance has been strong relative to recent years. Timely deliveries of contracted wheat into mills has packed wheat pipelines and depressed the KC spot basis.

“Farmers I’m hearing from are not talking about the condition of their crop, but the contract lows and cash wheat basis prices,” Gilpin said. “There’s a lot of anxiousness out in the countryside and the direction of prices right now and where they might be headed into harvest time. That’s probably what’s in the forefront of farmers’ minds right now. Basis is weak and weakening and spreads and carries are widening. It sure would help if the US could actually pick up some export demand. We’re waiting to see that happen and hopefully it does, because the wheat industry is going to need it.”

Tags: wheat, USA, crop condition