Weather plays havoc on wheat protein

The rain damaged red winter wheat crop in the U.S. could lead to strong protein premiums

A global shortage of high protein wheat will likely persist in 2015-16 due to harvest rains in the U.S. hard red winter wheat region.

“The conditions that we’ve had right now do not seem conducive to a high protein crop,” said Justin Gilpin, chief executive officer of the Kansas Wheat Commission.

“That’s certainly what the market is going to be watching.”

All eyes will be on protein premiums and the spreads between Kansas and Minneapolis wheat as the market sorts out how much quality damage was caused by excessive and untimely May rains.

Gilpin said the precipitation initially helped the Kansas wheat crop but it has reached the point where it is causing more harm than good to a crop that is about two weeks away from harvest.

There are large white patches in fields where plants have died due to flooding. Kansas City received 260 millimetres of rain in May, which is the sixth wettest May on record.

“Just this past weekend you’re really starting to see the effect of what too much water can do to wheat that is kind of getting to the ripened state,” he said.

“You’re starting to see it kind of go backwards.”

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But the real damage has been to winter wheat crops in Oklahoma and north Texas. Those crops were ready for the combine when so much rain fell that it caused extensive flooding throughout the two states.

Andy Karst, meteorologist with World Weather Inc., said Oklahoma City received 495 millimetres of rain in May, shattering the previous May record by 127 millimetres.

“It’s weird how that works. They certainly could have used some rain a while back and now it comes when they really don’t want it,” he said.

Bruce Burnett, CWB’s weather and crops specialist, said there is no doubt the May rains have reduced protein levels on what was shaping up to be a high protein U.S. winter wheat crop due to early-season drought conditions.

“It’s going to impact the quality obviously,” said Burnett.

“You’ve already probably lowered the protein and test weights of the wheat that is ripe and ready to be harvested.”

Burnett said the poor quality U.S. red winter wheat crop will be bearish for futures prices because they will drop to the lowest possible quality for delivery but it should result in strong basis levels for quality wheat.

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Gilpin said if the rain persists in Kansas the crop could end up in the same poor condition as the crops in Oklahoma and Texas. The forecast was for mostly dry weather in Oklahoma and Texas this week.

The U.S. Department of Agriculture is forecasting 272 million bushels of Kansas wheat. The Kansas crop tour estimate was 286 million bu. Both estimates are below average due to winterkill, early season drought and stripe rust disease.

Gilpin thinks the final number could be higher than the crop tour estimates because the May rains initially added some bushels but if the rain keeps falling his production estimate will shrink.

The USDA is forecasting 1.47 billion bu. of total winter wheat production, which would be slightly below the previous five-year average of 1.5 billion bu. That estimate was made on May 1 before all the rain fell.

The U.S. Department of Agriculture’s weekly crop condition report on June 1 showed the amount of U.S. winter wheat rating good to excellent dropped to 44 percent from 45 percent the week before.

State ratings for Kansas and Oklahoma were little changed but Texas declined.

In that state the amount rated as poor to very poor rose four percentage points to 17 percent, the amount rated fair rose one point to 32 percent and the amount rated good to excellent fell five points to 51 percent.

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Contact sean.pratt@producer.com