Drought dubbed the worst since the Dust Bowl years has
increased its toll on US winter wheat, reducing the condition of crops in Kansas,
the top producing state, and neighbouring Oklahoma.
The proportion of the Kansas wheat crop rated in "good" or "excellent"
condition fell four points to 20% this month, data from state farm officials
"Limited moisture in most areas caused the condition of the
winter wheat to decline," the officials said, estimating the proportion of the
crop in "poor" or "very poor" health at 39%, up from 31% at the end of
The figures also represented a sharp deterioration from a year
before, when 49% of winter wheat was rated good or excellent, and 12% poor or
Rory Deverell, at broker FCStone, said: "The Kansas wheat crop is in terrible condition."
Farm officials in Oklahoma too said that "conditions of all
small grains and canola declined over the past month and were rated mostly poor
or very poor", to the extent of 69%.
Kansas wheat condition, January 27, change on month, (year ago figure)
Excellent: 1%, unchanged, (7%)
Good: 19%, -4 points, (42%)
Fair: 41%, -4 points, (39%)
Poor: 25%, +3 points, (9%)
Very poor: 14%, +5 points, (3%)
Just 5% of winter wheat was seen in good health, and none
rated excellent."The result of the continuing drought has been poor
conditions for all fall-planted crops and limited grazing of small grains," the
officials said, flagging "another month of below-normal precipitation".
Most districts received 50% or less of normal rainfall last
month, at a time when they had already been in drought for months.
Indeed, the US drought monitor shows all of Oklahoma in
drought, with 92% suffering an exceptional or extreme lack of moisture, the top
All of Kansas is in drought too, rated exceptional or
extreme in 80% of the state.
"Due to the lack of significant water, many producers are
hauling water for livestock and are concerned about pasture conditions and low
or dried stock pond levels," Kansas farm officials said.
With Kansas and Oklahoma between them typically responsible
for about 20% of US wheat production, the drought - which has a firm grip on the
likes of Colorado and Nebraska too - has raised fears for the 2013 harvest,
particularly of the hard red winter wheat prevalent in the worst-affected states.
Producers' group Kansas Wheat cautioned two weeks ago that "a
smaller Kansas wheat crop could be in store" this year, noting also a 200,000-acre
drop in sowings.
"Even after rain and snow events this month the state is
abnormally dry," the group said.
US Wheat Associates, which aims to promote foreign demand
for US wheat, said that the "stubborn grip" of drought is, after first
appearing in Texas four years ago, "expanding in the US hard red winter wheat
production region and now threatens some hard red spring wheat areas as well".
"Unfortunately, long-range forecasts do not anticipate much
Not over yet
However, at Benson Quinn Commodities, Brian Henry urged against
premature pessimism, given the extent of the growing season yet to come.
"While there is no debating that the hard red winter wheat crop
was in poor shape as it entered dormancy, it's too early to factor in the demise
of the crop.
"This situation merits some attention as the crop approaches
the growing season, but the amount of risk premium needed in the market is
limited by the fact that future moisture events can help this crop."
Furthermore, exports of hard red winter wheat have been "slow,
which is offering some supply cushion into the next marketing year".
At broker Country Futures, Darrell Holaday said: "With the wheat in dormancy it is hard to give a lot of credibility" to the crop ratings.