Wheat Market Outlook

By TAMU

Market Situation

Crop Condition Reports. The benefit of recent snowfall is starting to show in wheat crop condition reports, not counting the winter storm raging in the plains today. The crop condition index score (1 * % very poor + 2 * % poor + 3 * % fair + 4 * % good + 5 * % excellent; min 100, max 500) is 8 points higher in Kansas than the last report, 30 points higher in Oklahoma, and 15 points higher in Texas.

Southern Plains Weighted Wheat Crop Condition Index

Percent of national winter wheat production, 5-year average: Kansas 22%; Oklahoma 7%; Texas 5%

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.

Weather. Precipitation totals the last 30 days show a half inch or better across most of the hard red winter wheat production area, portions of southeast Colorado excluded. The next seven days calls for the system to move east, drying out in the west and south. The Oceanic Nino Index continues to vacillate between La Nina and El Nino conditions with the low reading for the winter expected to be set by the end of the current three month period, December/January/February.

Exports. Wheat export sales continue on pace to reach USDA’s marketing year target. Export sales for the week of February 14th were 25.7million bushels. The average so far this year is 17.2million bushels and the pace needed to reachUSDA’s 1,050 million bushel targetis 15.3 million bushels.

Commitment of Traders. Speculative investment in the grains was bearish again last week. Net long hedge and index funds were down 61,247 contracts, following last week’s -71,276. However, soybeans saw in increase in hedge net longs and higher soybean prices (+50 cents per bushel) pulled the grain index 14 points higher.