OMAHA (DTN) -- The U.S. Southern Plains hard red winter wheat crop, which is now being harvested, has had a variety of weather issues: drought, low temperatures and late-season heavy rain. As of Sunday, June 29, harvest progress nationwide was 5 percentage points behind average. Less than half the crop -- 43% -- was in the bin. However, the crop is not a full-fledged disaster; there have been some surprisingly good performances.
"It has been an interesting year in that wheat just keeps hanging on," said Kansas State agronomist Jeanne Falk-Jones in a weekly harvest report by the Kansas Wheat Growers Association.
That resilience of wheat is reflected in the wheat market's perception of world prospects. At this point, Southern Plains drought is viewed as the only big trouble spot in the world's major wheat-growing regions.
"KC wheat prices are holding above important support at $7 (a bushel), but unless more problems emerge from elsewhere around the globe, it will be very difficult for wheat prices to trade much higher," said DTN Grain Market Analyst Todd Hultman. "Until those basic conditions change, the future course for wheat prices is lower."
One of those high-profile regions is the Black Sea region: Ukraine, Belarus, South Russia and West Russia. This region suffered from drought two years ago, recovered somewhat in 2013, and is looking very promising for its production in 2014, with mid-June conditions bolstering that outlook.
"Widespread showers and below-normal temperatures further improved yield prospects for wheat and summer crops across much of the region," noted USDA's Weekly Weather and Crop Bulletin June 23. "A slow-moving cold front generated periods of light to moderate rain from eastern Ukraine into southern and western Russia, boosting soil moisture for reproductive to filling winter heat and vegetative summer crops. In addition, sharply cooler weather eased any lingering concerns over heat stress from the previous weeks, with daytime highs dropping to near-ideal levels for crop development." Recent rains have also been noted farther east into Kazakhstan and Siberia (former Soviet New Lands regions), where spring wheat is grown.
Later in 2014, Australia's wheat crop will be harvested. Australia is an important competitor, with particularly a large portion of the Western Australia wheat crop going directly to the export market. At this point, the analysis is "good to excellent" for wheat in Western Australia according to USDA. "Farther east, scattered showers in South Australia, Victoria, and New South Wales continued to benefit winter grains and oilseeds, further aiding emergence and establishment. In southern Queensland, sunny skies and
generally adequate topsoil moisture spurred winter wheat development," USDA reported.
Other major wheat areas such as the northern U.S. Plains and Canadian Prairies spring wheat region have some issues with wet soils, but at this point, not of enough extent to rattle the market significantly. The Saskatchewan weekly crop report as of June 23 rated winter wheat at 70% in good-to-excellent condition and spring wheat at 82% in good-to-excellent condition.
"A deluge of rainfall in eastern Saskatchewan and western Manitoba over the June 28-29 weekend dropped as much as 200 millimeters (8 inches) of rain on already saturated soils, with some estimates suggesting losses from acres not seeded or seeded and then flooded could be in the millions of acres for all crops, yet markets continue to reflect a lack of concern," said DTN Canadian Grain Analyst Cliff Jamieson.
In India, a slow-starting monsoon season also has failed to excite the grain trade yet.
"Concerns about dryness in parts of India are not significant enough to motivate the buy side of the market," said Hultman.
Bryce Anderson can be reached at email@example.com
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