Moisture from the storm that swept across the American southern plains on the weekend was a benefit to the winter wheat crop there.
But overnight lows this week are expected to drop below freezing so there is also potential for damage, depending on how cold it gets, the duration of the freeze and whether there is snow on the ground.
The storm has the potential to be a market mover following several quiet weeks in the wheat market.
While canola futures pushed ever higher through the winter, the wheat futures rally stalled in late January and then levelled out. The last major news affecting the wheat market was in January when Russia’s government announced the imposition of an export tax. Around the same time, rising corn prices, propelled by strong sales of American corn to China, also supported the wheat market.
Spring wheat May futures in February and March traded mostly in a 30-cent range, roughly from US$6.25 to $6.55 per bushel.
The winter wheat crop was seeded on 31.99 million acres, a five percent increase. The region has been dry since the fall and much of northern Kansas and most of Nebraska are suffering moderate to extreme drought.
National crop condition ratings start in April but individual states post updates.
On March 7 the Kansas wheat crop was rated eight percent very poor, 19 percent poor, 37 percent fair, 33 percent good, and three percent excellent.
That is a little worse than last year at the same time when four percent was very poor, 14 percent poor, 35 percent was fair, 41 percent good, and six percent excellent.
Oklahoma’s wheat crop condition is also a little worse than the previous year.
The condition will likely improve following the recent moisture.
The storm was also expected to deliver moisture into parts of the U.S. Midwest.
The storm might prove to be an anomaly in what is forecast to be a dry, warm spring for the southern plains of the United States.
If the forecast proves correct, it could stress wheat, but of course it is too early to predict the impact on final yield for the resilient crop.
Around the world, winter wheat is coming out of dormancy and forecasters are assessing conditions.
Grain trade association Coceral cut its forecast of soft wheat production in the European Union and Britain to 141.5 million tonnes from 143 million in December, Reuters reported last week. That is still well above last year’s 128.2 million tonne crop.
Ukraine’s winter wheat came through winter in good shape and soil moisture in most areas is optimal, said the head of the country’s agriculture department.
Russia’s winter crop was in rough shape in November after a dry fall, but last week the state weather forecaster said the mild winter had dramatically improved conditions.
Now, only seven to nine percent of winter crops are in poor condition compared with 22 percent in early December.
Analyst Andrey Sizov in the Sizov Report blog said he thought that assessment was too optimistic, given a sizable region is suffering from ice crusting, but he agreed conditions were not as bad as in the fall.
The 2021-22 crops coming out of dormancy now won’t be harvested until this summer. In the meantime, supply of old crop wheat is still comfortable.
The U.S. Department of Agriculture released its monthly update of global supply and demand last week. It was not a market mover for wheat, but did adjust some numbers.
It raised the global 2020-21 crop estimate by 3.3 million tonnes to 776.8 million with almost all the gain coming from an upward revision to Australia’s crop.
It now stands at 33 million tonnes, a record large wheat crop for that country.
The USDA also raised its estimates of global trade and consumption. Most notably, it raised the amount of wheat that China will feed to livestock by five million tonnes to 35 million, as corn is still more expensive than wheat in that country.
The USDA lowered its forecast for global year end stocks to 301 million tonnes, down about three million from last month, but still up slightly from last year’s 300 million.
Fifty percent of the stocks are held by China and a further nine percent by India.
It sees Canada’s ending stocks at 4.33 million tonnes, down from 4.63 million in last month’s report and 5.5 million last year.
Canada continues to export wheat at a remarkable pace.
The Canadian Grain Commission said that as of March 7, Week 31 of the crop year, wheat exports stood at 11.77 million tonnes, a 30 percent increase over the same point last year and 10 percent ahead of the pace two years ago.