Storms which have bought more than 18 inches of snow to parts of the US Plains have begun to foster improvement in winter wheat crops which entered dormancy in their worst condition since the 1980s.
Farm officials in Kansas, the top wheat growing state, said that the proportion of the crop rated in "good" or "excellent" health improved by three points in the month to Sunday, albeit remaining at a historically low 23%.
"Snow brought much-needed moisture throughout the state at the end of February," US Department of Agriculture field staff said, reporting more than 2 inches of precipitation, in rainfall terms, in some areas.
"Welcomed precipitation in some areas slightly improved the condition of winter wheat."
'Crop conditions improved'
In Oklahoma, where winter wheat has also been tested by drought, the proportion of winter wheat rated good or excellent rose four points to 9%, with the percentage rated "poor" or "very poor" dropping to 54% from 69% at the end of January. Kansas wheat condition, end-Feb, change on month, and (year on year) Excellent: 1%, unchanged, (-6 points) Good: 22%, +3 points, (-23 points) Fair: 41%, unchanged, (+4 points) Poor: 24%, -1 point, (+16 points) Very poor: 12%, -2 points, (+9 points) Source: USDA |
"Multiple rain and snow events throughout February provided improvements to soil moisture conditions," USDA officials said, adding that precipitation had been "above normal" over the last month, if remaining 37% below average since September 1.
"Conditions of small grains and canola improved due to the available moisture."
In Texas, another drought-hit winter wheat state, which like Kansas and Oklahoma grows hard red winter varieties, the proportion rated good or excellent rose four points in the week to Sunday, reaching 18%, although still remaining behind the 21% at the end of November, the last autumn reading.
'Benefit starting to show'
The readings followed last week's snows, which brought more than 20 inches to some areas of the Plains, but ahead of the current storms, which prompted blizzard warnings over parts of Kansas, Oklahoma and Texas.
Oklahoma wheat condition, end-Feb Excellent: 0% Good: 9% Fair: 37% Poor: 35% Very poor: 19% Source: USDA |
"The benefit of recent snowfall is starting to show in wheat crop condition reports, not counting the winter storm raging in the plains today," Mark Welch at Texas A&M University said.
He noted that in Texas, "the crop condition score has been tracking in a pattern similar to that of 2008, a year when the state average yield was about normal at 30 bushels per acre".
The yield last year was 32.0 bushels per acre.
'Bulls have seemingly given up'
"Further heavy snow throughout the hard red winter wheat belt last night, which complements last week's snowfall, is providing another significant improvement in soil moisture and helping alleviate existing drought conditions."
Texas wheat condition, end-Feb, change on week and (year-on-year) Excellent: 2%, +1 point, (-6 points) Good: 16%, +3 points, (-7 points) Fair: 37%, unchanged, (+11 points) Poor: 28%, +2 points, (+3 points) Very poor: 17%, -6 points, (-1 point) Source: USDA |
However, while noting that "bulls have seemingly given up on wheat prices", which closed on Monday at their lowest since, he cautioned over excessive pessimism despite the crop improvements.
"[Investor] appetite could quickly return on the back of improving export demand or an unforeseen weather scare," he said.
"This is particularly the case as funds have recently amassed a large net short position," with speculators holding a net short of approaching 50,000 contracts, not far from record highs.
Chicago wheat futures, while setting a fresh eight-month low of $6.92 ¾ a bushel in early deals, stood at $7.00 a bushel, with the better-traded May contract at $7.05 ¼ a bushel, unchanged on the day.