Wheat markets are getting a lot of price-supporting information.
The situation in Argentina is covered on Page 6. Also, we report this week that Canadian wheat stocks are smaller than expected.
We reported in early April that frost had hit the American winter wheat crop, adding to existing drought damage.
The damage was worst in Texas and Oklahoma, but a tour of Kansas led by the U.S. Wheat Quality Council last week shows that key producing state also has problems.
It forecast production at 333.3 million bushels, down from the tour’s 2008 estimate of 379.1 million. Kansas last year produced 356 million bu.
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Wheat Quality Council executive vice-president Ben Handcock told Reuters News Service that timely rains in recent weeks had improved the crop dramatically but the crop was still a disappointment.
“It’s not as good as I expected,” said Handcock. “There is some wheat that was dry for way too long.”
The Kansas crop is more important this year because the Oklahoma Wheat Commission last week pegged potential production there at only 77.4 million bu. down from 166.5 million bu. last year.
The U.S. Department of Agriculture released its latest read of the American wheat crop on May 12, the day after our deadline. Analysts expected the report would show a winter wheat crop of about 1.527 billion bu., down 341 million or about 18 percent less than last year.
The Wheat Quality Tour said most of the Kansas crop looked good, but there are worries that as it heads out, quality problems will become apparent as they have in Oklahoma and Texas.
Additional market-supporting information comes from Ukraine and parts of eastern Europe, where it is getting dry. Also, frost in April damaged crops in parts of Ukraine.
Delayed seeding of spring crops in the U.S. Northern Plains, Midwest and in Western Canada also supports wheat prices.
As of May 10, 35 percent of the U.S. spring wheat crop had been seeded compared to the five-year average of 78 percent.
In the Midwest, 48 percent of the corn crop had been seeded, compared to five-year average of 71 percent.
The wheat market will still have to contend with large global stocks carried into the new crop year, but the price outlook is much better now than it was a few months ago.
