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Struggling US wheat may yet deteriorate further

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The condition of US winter wheat seedlings may yet worsen still after declining again last month thanks to unusually cold weather, commentators including US agriculture big shot Joseph Glauber said.

The US Department of Agriculture overnight revealed further deterioration in domestic winter wheat, including in the top producing state, Kansas, where the proportion of crop rated "good" or "excellent" eased one point month on month to 34%.

While above the 23% figure at the end of February last year, and representing a sharp slowdown from the decline reported for January, the reading is below the average of 41% for the five years to 2013.

"Average temperatures were colder than normal [last month], with most areas averaging 6-10 degrees colder than normal," USDA scouts in Kansas said.

'Desperate need of precipitation'

In Nebraska, where temperatures were 6-9 degrees below normal in February, winter wheat was rated 43% good or excellent, down three points on a month before.

Crop condition, good + excellent, and (month on month change)

Kansas winter wheat: 34%, (-1 point)

Nebraska winter wheat: 46%, (-3 points)

Oklahoma canola: 20%, (-13 points)

Oklahoma oats: 27%, (-10 points)

Oklahoma winter wheat: 31%, (-5 points)

Texas oats: 36%, (-3 points)

Texas winter wheat: 5%, (-4 points)

And further south, deterioration was greater, given the worse drought conditions, in part thanks to patchy snowfall which has left many fields without sufficient cover to protect seedlings from frost.

In Oklahoma, of which 62% was in drought as of February 25, up 15 points week on week, the proportion of winter wheat rated good or excellent fell five points during February to 31%.

"Producers in Roger Mills County were in desperate need of precipitation," USDA scouts said, in a briefing entitled "drought conditions worsen".

"During the latter part of the month, high winds and worsening drought conditions contributed the extreme fire danger and the overall damage to crops and topsoil moisture.

Some canola - of which only 20% was rated good or excellent, down from 33% at the end of January – "was lost to winter kill".

In Texas, of which 68% is in drought, up 10 points week on week, the crop was rated 15 points good or excellent, down four points for the month.

'Significant concern'

And the condition data could yet decline further, given cold temperatures this week which have closed schools, shut down Washington and forced the cancellation of nearly 3,000 flights.

"The storm over last weekend failed to provide enough snow as expected, thus leaving certain portions of the US Plains at risk of a cold snap," Vanessa Tan at broker Phillip Futures said, adding that she was "bullish on US wheat" prices.

In Minneapolis, Jonathan Watters at Benson Quinn Commodities said that "southern Plains weather concerns are slowly building as we head toward spring".

While a weekend storm bought 0.25-0.5 inches of snow "to a significant portion of Kansas/Oklahoma, but the panhandle region was short-changed.

"Cold temperatures remain a significant concern, with temperatures in central Kansas below zero on Monday morning."

'Main concerns'

Separately, Joseph Glauber – as chief economist at the US Department of Agriculture, one of the most important figures in world farming – also cautioned over of a "main concern" over the dearth of precipitation in the southern states.

"We still have a lot of dryness in the southern Plains," he told a conference in Australia, adding that a continuation of the unusually cold US weather could prove an issue too.

"We have had snow cover over a lot of the regions and to a degree that has protected things, but the concern is that when you have a bit of warm weather and wheat popping out of dormancy," he said.

"The persistence of winter has been a problem."

By Agrimoney.com

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