Australia, US, EU stoke fears over parched wheat

US farm officials have warned of a "critical" need for rain for winter wheat, while fears are growing for Australia's main grain state, as dryness emerges as an increasing threat to hopes for a jump in world wheat production.

The state of Western Australia has, on the eve of the state's winter grains planting season, warned of "emerging evidence" that rainfall for the next three months "will be lower than normal" over the south of the state.

The caution cuts hopes of an end to drought in a state which has typically produced roughly 40% of Australian wheat, but where soil moisture levels are, in the central agricultural belt, all-but zero, and exceed average levels only in a small area to the north of the state.

"The Central and Great Southern areas are very dry," the state said.

Europe, Africa, US... 

The comments come amid concerns for dryness in northern Europe, where a lack of soil moisture is challenging crops emerging from winter dormancy.

"Dry conditions are forecast at least until the middle of next week according to weather services," Agritel, the Paris-based consultancy, said on Tuesday, adding that these predictions "should limit [price] losses on the European markets".

Meanwhile, in North Africa, Algeria on Monday warned of drought in grain areas.

And the US revealed a further decline in the condition of its winter wheat crop, which accounts for the bulk of the country's harvest.

The proportion of the crop rated in "good" or "excellent" condition fell by one percentage point on the week to 36%. The figure was 65% a year ago.

The amount in "poor" or "very poor" health was, at 36%, up four points on the week and compared with just 6% a year ago.

'Critical need' 

The poor rating is centred on the states growing hard red winter wheat, the type traded in Kansas, with the amount of the Kansas crop in the top two ratings bands falling by three points to 28%.

"High winds and dry conditions continued to stress the wheat crop in many areas," the US Department of Agriculture said.

In Oklahoma, the proportion of the crop in above average condition fell by five points to 11%, following "another hot and dry week".

"The last four months are the fourth driest such period on record, and the driest since 1971," the USDA said.

"Signs of drought stress were evident throughout crop fields and the need for precipitation is critical."

'Very good condition' 

However, the condition of US soft red winter wheat, the variety traded in Chicago, was considerably better, with 60% of the crop in Illinois, for instance, rated in the top two bands.

Separately, Michael Cordonnier noted from a field trip an "eye-popping" level of soft red winter wheat planted in Mississippi Delta states, such as Arkansas, Louisiana and Mississippi, which are usually relatively small growers.

"The general condition of the wheat in the Delta looked very good," Dr Cordonnier, at Soybean and Corn Advisor, said.

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