Canada Markets

Today's U.S. Drought Monitor report released in the United States shows conditions in the northwest border states of Montana, Idaho and Washington experiencing a growing D2 or Severe drought, shown in gold on the attached graphic.

The area of Montana facing some degree of drought remained steady over the past week at 59.92%, although there was a shift from the D0 Abnormally Dry category to the D1 Moderate Drought and the D2 Severe Drought categories. The Abnormally Dry area is rated at 19.36% of the state, the Moderate Drought area at 24.33% and the Severe Drought area at 16.23% of the state, found at the western side of Montana.

The June 28 Crop Progress report for the state rates the barley crop at 57% Good to Excellent, down from 61% the previous week and the five-year average of 65%. Barley acres in the state were reported at 1 million acres in this week's USDA Acreage report, 9.8% above last year and 18.3% above the five-year average. Montana is reported to seed 29.6% of the U.S. barley acres.

The spring wheat crop in Montana was rated at 56% Good to Excellent as of June 28, down 4% from the previous week and the five-year average of 64%. Spring wheat acres in the state were reported at 2.8 million acres, down 8.2% from last year and just slightly below the five-year average. Montana is expected to seed 20.7% of the spring wheat acres.

Montana's durum crop was rated at 37% Good to Excellent as of June 28, down from 46% the previous week and the five-year average of 75%. Durum acres were estimated at 630,000 acres, close to one-third of the U.S. acreage, and 46.5% above last year's acreage and 31% above the State's five-year average. The durum is largely seen grown in the north-east corner of the State which of which a portion of the area is rated as normally dry.

Data also shows Montana having seeded 2.4 million acres of winter wheat, 5.9% of the total winter wheat acres seeded in the U.S. which is currently rated at 55% Good to Excellent, down 3% from the previous week and the five-year average of 66%.

The entire state of Idaho has faced some degree of moisture deficiency over most of the last nine weeks. The past week has seen a shift from D1 or Moderate Drought to D2 or Severe Drought category, with 17.89% of the state Abnormally Dry, 37.44% facing Moderate Drought, 38.38% dealing with Severe Drought and a stable 6.29% in Extreme Drought.

This week's USDA Acreage report shows Idaho having seeded 610,000 acres of barley, up 50,000 acres from last year and the five-year average. This acreage represents roughly 18% of the country's total. The crop was rated at 90% Good to Excellent as of June 28, down just 1% from the previous week, with concerns that recent temperatures of 5 to 10 degrees F above normal will continue to stress cereals in upcoming weeks.

The Acreage report also indicates 570,000 acres of spring wheat varieties, 18.8% above last year and just slightly higher than the five-year average. This represents 4.2% of the total spring wheat acres seeded in 2015 in the U.S. The spring wheat crop is rated at 81% Good to Excellent, down just 1% from the previous week with ongoing concerns over heat stress.

Idaho is estimated to have seeded 760,000 acres to winter wheat, 1.9% of the country's total, currently rated at 62% Good to Excellent.

The entire state of Washington has faced some degree of moisture shortfall over the past two weeks, with 7.48% of the state Abnormally Dry, 46.72% of the state facing Moderate Drought and 45.79% dealing with Severe Drought conditions. There was a significant shift in the past week from the D1 to the D2 category as the northwestern U.S. faced record temperatures in the past week.

This week's Acreage report shows the Washington state's producers having seeded 1.750 million acres of winter wheat, rated at 39% Good to Excellent and 620,000 acres of spring wheat, down from 41% the previous week and 620,000 acres of spring wheat, rated at 47% good to Excellent, down from 52% the previous week. Extreme temperatures continue to stress dry land crops while farmers with crops under irrigation face difficulty in meeting the crops' moisture needs.

Thursday's DTN Market Weather Factors for wheat were viewed as neutral for wheat as overall North American conditions were balanced with varied global conditions.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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