April 27, 2011

 

Rains cause panic over US soft red winter wheat

 

 

In spite of being unaffected by disease concerns, America soft red winter wheat, previously a beacon of hope for wheat production amid harsh condition damaging other crops, is now experiencing weather setbacks.

 

Concerns for world wheat continue to centre on America hard red winter variety, the country's main wheat crop which has suffered persistent dryness, leaving only 5% of Oklahoma's fields in good or excellent condition, according to a government report out late on Monday (Apr 25).

 

"Although the weekend rains in Oklahoma were desperately needed, it may be too late to benefit the wheat crop as conditions are still dismal and yield potential has been severely limited," the USDA said.

 

The briefing also highlighted fears for America's rain-delayed spring wheat sowings, pegging them at 6% completed, compared with an average of 25% by now.

 

However, brokers put the US soft red winter on the watch list too after USDA showed the condition of this variety deteriorating, if remaining at elevated levels.

 

In Illinois and Missouri, where growers more than doubled sowings of the wheat variety last autumn, the proportion of crops rated good or excellent tumbled by nine points to 56%, and 13 points to 58%, respectively.

 

"There are worries about soft red winter wheat too. It is wet," a broker said.

 

At Macquarie, an analyst highlighted fears that if the rain continues, more disease issues will start cropping up in soft red winter.

 

The variety traded in Chicago has lower protein content, and is typically cheaper, than the harder wheats, and is typically used in cakes and biscuits, as well as commonly in livestock feed.

 

However, he added that it was still too early to start talking about yield loss in soft red winter wheat, unlike for hard red winter crop, for which estimates for the US harvest had been cut from more than 800 million bushels nearer to 750 million bushels, and which he believed come in closer to 735-740 million bushels.

 

Furthermore, the slow rate of spring sowings had put the USDA's estimate of 14.4 million acres of spring wheat in doubt.

 

"There is an increased risk that might end up below 14 million acres if it does not warm up quickly," the analyst added.

 

Spring sowings have been slow north of the border in Canada too, where the Canadian Wheat Board said that plantings on the key agricultural Prairies area, usually 4% completed by now, and 12% down a year ago, had yet to begin.

 

"Cool temperatures, 1-8 degrees below normal, continued to hinder snow melt and field drying over the past week," the board said, while highlighting a positive factor of little recent rain.

 

Meanwhile, northern wheat areas in China, the top producing country, dry weather looks like continuing to test winter-sown crops.

 

"None of the weather models show any sort of significant rain coming over the next seven days for any portion of Manchuria with the north China plains," another analyst said.

 

However, prospects have improved for Russia, with warmer temperatures displacing the cold weather which has held back spring grains sowings to 40% below last year's levels.

 

The second analyst also held out prospects of rain for dry northern Europe too.

 

"The weather models are showing that the block in the jet stream over north central Europe and lower Scandinavia will continue to move slowly west towards the UK and Iceland by day 9-10," the second analyst added.

 

"This could allow for a more normal made it a spring weather pattern to develop and a return to seasonal rainfall for central and western Europe redeveloping sometime after May 6."