Heat and drought rewriting 2017 wheat story

(Editor’s note: the print version of the story has incorrect information about the amount of rain in Saskatchewan. The story has been corrected here.)

My car thermometer hit 38 C July 16 as I drove an area around Moose Jaw, Sask., although Environment Canada said the official high was 34.9 C.

Whatever it was, it was smokin’ hot in an area that has had almost no rain in the past 30 days.

Indeed, a big part of Saskatchewan, mostly from Saskatoon south, has had only 40 to 60 percent of average precipitation since April 1, according to Agriculture Canada maps.
 Some pockets have had less than 40 percent of average rain.

It is a testament to soil moisture reserves carried into this year’s growing season that there is much growth at all.

And when the mercury climbs above 30 C in these areas, the stress has to be severely hurting yield potential.

We’ll have one assessment of prairie production potential this week when Bruce Burnett, director of markets and weather information at Glacier FarmMedia, releases the results of his 4,000 kilometre crop tour at the Ag In Motion show. We’ll have a story on Burnett’s forecast on our website and in next week’s paper.

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Agriculture Canada will begin surveying farmers later this month for its first report on production, set to be issued Aug. 30.

The U.S. Department of Agriculture last week cut its forecast of the domestic spring wheat crop to 423 million bushels, or 11.5 million tonnes, on a yield of 40.3 bu. per acre. That is down from 534 million bu. (14.5 million tonnes) on a yield for 47.2 bu. per acres last year. The five-year average is 561 million.

It would not surprise me if the USDA further trims that number. The U.S. national spring wheat crop condition rating dipped again this week. The good to excellent rating in North Dakota dropped four percentage points to just 32 percent. Last year it was 73 percent.

The USDA pegged U.S. durum production at 57.5 million bu., down from 104.1 million last year.

The department left its forecast of Canadian all wheat and durum production unchanged at 28.23 million tonnes.

It will be substantially less than that. Saskatchewan Agriculture last week said the spring wheat crop was 68 percent good to excellent, down two percentage points from June 26. Last year at this time it was 92 percent.

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Durum was only 43 percent good to excellent, down from 49 percent June 26 and 93 percent last year.

Alberta also issues crop condition ratings. Its report last week said the spring wheat crop was holding up well at 73 percent good to excellent, down about four percentage points from the previous week. Last year it was 82 percent at the same point, but in 2015 the drought in Alberta was severe and the condition was only 32 percent.

In 2015, western Canadian crops were rescued by a turn to better weather about mid-July. So far, I don’t see a major weather change happening this year with temperatures often getting up to 30 C or hotter and little rain expected for the rest of July.

The USDA did trim its outlook for Australian wheat production to 23.5 million tonnes from 25 million last month, but analysts Down Under are now talking of a crop near 20 million tonnes if rain does not arrive soon.

The wheat production cuts that the USDA made last week were in large part offset by a three million tonne increase in its outlook for the Russian crop. It said conditions there during the growing season were almost ideal. However, rain has disrupted the harvest, which could mean another major world crop with quality problems.

Last week’s USDA report seem to give the market some confidence that supply will be adequate, but I think the whole story has not yet been written for wheat.

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Meanwhile, the huge corn and soybean crops in the U.S. Midwest do not appear to be seriously threatened by the weather. So long as they are OK, that limits the potential for market panic.