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Rains hand US spring wheat its first improvement this season

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The drought-hit US spring wheat crop pulled out of decline, showing its first improvement this season, thanks to rains.

However, it was dryness which had a key role in boosting soybean yield condition – while cool temperatures have emerged as a worry for cotton growers.

The US Department of Agriculture pegged at 32% the proportion of domestic spring wheat rated in "good" or "excellent" condition as of Sunday.

While still a low reading – the average for the past three years in early August is 69% good or excellent – it represented a 1-point increase week on week.

That was the first rise in weekly condition readings for the crop this season, which has been marked by drought in the northern Plains, the key spring wheat-growing area.

(In fact, it was the first rise in a USDA spring wheat condition rating since May 2016.)

'Much-needed rain'

The upgrade reflected improvement in the crop in North Dakota, which typically produces about half the US spring wheat crop, and where the reading rose by 4 points to 33% as drought saw some rain relief.

Spring wheat rating, Aug 7, in top growing states, (change on week)

Minnesota: 85%, (-2 points)

Idaho: 53%, (unchanged)

Washington: 43%, (unchanged)

North Dakota: 33%, (+4 points)

Montana: 9%, (unchanged)

South Dakota: 8%, (unchanged)

US average: 32%, (+1 point)

Data show % of crop rated in good or excellent condition. Source: USDA

In fact, the area of the state where topsoil was rated "short" or "very short" of moisture dropped 6 points week on week to 67%.

The North Dakota crop improvement more than offset a 2-point easing in the Minnesota spring wheat reading, to a still-lofty 85%.

"Rains quenched the dry areas through the middle of the state, but some southern and northern counties were left hoping for more," USDA crop scouts in Minnesota said.

'Limiting the production potential'

The data come ahead of a much-anticipated USDA monthly Wasde report on Thursday, giving world crop supply and demand estimates, which is expected to lower the forecast for the US spring wheat harvest this year.

In the Wasde, the "most important wheat number will be the USDA's updated take on US hard red spring wheat production, with trade looking for a 33m-bushel cut to 393m bushels" in the harvest, Richard Feltes at Chicago-based broker RJ O'Brien said.

Spring wheat prospects in Canada, where the key Prairies region has also been unduly dry in many areas, are also under the microscope, with the ratings on the Alberta and Saskatchewan crops depressed, if not anywhere near as poor as those in the US.

"The relatively warm, relatively dry conditions in western Canada are limiting the production potential of that crop," said Minneapolis-based Benson Quinn Commodities.

"It's by no means a failure, but the crop isn't going to measure up very well against production of the prior year."

'Shallow root systems'

The condition of the country's soybean crop rose too last week, with the good or excellent reading edging 1 point higher to 60%, although that was largely down to drier weather in some eastern growing states, such as Indiana and Ohio, where excessive moisture has been a problem.

Soybean crop rating, Aug 7, in selected states, (change on week)

Mississippi: 72%, (+3 points)

Illinois: 64%, (-2 points)

Iowa: 59%, (-1 point)

Indiana: 54%, (+3 points)

Ohio: 53%, (+5 points)

South Dakota: 32%, (+4 points)

US average: 60%, (+1 point)

Data show % of crop rated in good or excellent condition. Source: USDA

"Shallow root systems in crops created concerns about adequate and timely precipitation," USDA scouts in Ohio said.

Meanwhile, for corn, the condition reading fell by 1 point, also to 60% good or excellent, amid outstanding worries over dryness in Illinois and Iowa, the top two growing states.

In Iowa, "most of the state received below-normal precipitation during the week," while the Illinois corn condition reading tumbled by 5 points to 58% good or excellent.

BIll Northey, the Iowa agriculture secretary, said that "the lack of significant rain means drought conditions remain in place for many parts of Iowa, with severe drought in much of south central and south east Iowa".

'Heavy rain and damaging winds'

In cotton, the USDA crop condition reading rose by 1 point to an above-average 57% good or excellent, reflecting a 1-point rise to 45% in the reading for Texas, the top growing state, where bumper rains, of 5 inches in places, eased dryness worries.

"Strong storms were reported late last week, bringing lower temperatures, heavy rain and damaging winds in some parts of the state," said USDA officials in Texas.

However, the shift to colder and cloudier weather has in turn created fresh crop worries.

"Cotton farmers in the Northern Low Plains were concerned low temperatures could affect cotton growth."

Quality worries

Trading house Ecom said that while the Texas rains "should give the crop a boost", there are now "some concerns that consistent cold temperatures which have been lingering could cause some issues to the quality of the crop come harvest time.

"For the crop to utilise the heavy rain falls we need sun along with some warmer temperatures."

By Mike Verdin

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