April 7, 2009

The US Department of Agriculture, in its first weekly crop progress report of the year, said Monday (April 7) that 43 percent of the country's winter wheat is in good-to-excellent condition, down from 65 percent last fall.

The good-to-excellent rating is down slightly from a year ago, when 45 percent of the crop was seen as good to excellent. The USDA said 22 percent of the crop is poor-to-very poor, just above the 21 percent last year and from 8 percent last fall. The agency's last progress report was issued Nov. 24.

The drop in the national ratings from last fall was led by hard red winter wheat crops, with crops in the southern and central plains putting pressure on the national average, said Shawn McCambridge, senior oilseed analyst at Prudential Bache in Chicago.

Kansas, Texas and Oklahoma crops deteriorated over the winter, leading the declines in hard red winter wheat crops, McCambridge said.

In Kansas, the top hard red winter wheat-producing state, 39 percent of the crop was rated good-to-excellent as of Sunday and 17 percent was rated poor-to-very poor. Last fall, 74 percent was rated good to excellent, while 8 percent was rated poor-to-very poor.

In Oklahoma, 25 percent of the wheat was rated good-to-excellent as of Sunday, down from 63 percent last fall. The USDA said 37 percent of the crop was poor-to-very-poor, up from 6 percent last fall.

In Texas, 12 percent of the wheat was rated good-to-excellent as of Sunday, down from 48 percent last fall. The USDA said 64 percent of the crop was poor-to-very poor, up from 16 percent last fall.

The decline in the hard red winter wheat crops is a little surprising, as people thought despite the stress from a very dry winter, the HRW wheat belt received significant precipitation in recent weeks aid crops, said Jack Scoville, analyst with Price Futures Group in Chicago.

"Based off these numbers, I would think this would be a touch positive for price action heading into the overnight trading session," Scoville said.

In Illinois, where producers grow soft red winter wheat, 80 percent of the crop was seen as good-to-excellent, up from 78 percent last fall, and 3 percent was seen as poor-to-very-poor, up from 0 percent last fall. In Indiana, 74 percent of the crop was rated good-to-excellent, down from 75 percent last fall, and 1 percent was rated poor-to-very-poor, up from 2 percent last fall.

Meanwhile, the below-average hard red winter wheat rating was expected by Citigroup Global Market Inc., while winter white and soft white were anticipated to be reported at or above average, according Citigroup.

HRW and hard red spring wheat are used to make bread. SRW wheat is used for pastries and snack foods.