Rain has finally fallen on Oklahoma, but not on the state’s wheat fields.
Thunderstorms over the Easter weekend dumped rain on the eastern half of Oklahoma, but the precipitation was really needed elsewhere, said Mark Hodges, a grain marketer in the state.
“It (fell) outside of the normal wheat belt,” said Hodges, executive director of Plains Grains, a nonprofit wheat marketing organization in Stillwater, Okla., which represents producers from Nebraska to Texas.
“If we should happen to get moisture in wheat areas (in Oklahoma), it wouldn’t be a matter of increasing yield. It would be a matter of preserving what we have…. I wouldn’t want to put an exact number on it, but my feeling is that Oklahoma will raise half of the (normal) crop, if we’re lucky.”
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Last year Oklahoma produced 120.9 million bushels of winter wheat, the third largest production after Kansas at 360 million bu. and Texas at 127.5 million
The lack of rain over the Easter weekend in the hard red winter wheat growing regions of Kansas, Oklahoma and Texas caused wheat prices to jump 20 cents per bu. shortly after the opening bell at the Kansas City Board of Trade April 25.
By early morning, prices had surpassed $9.60 for July futures contracts, which was more than 20 percent higher than when Kansas City hard red wheat futures dipped below $8 per bu. in mid-March.
Hard red spring wheat on the Minneapolis Grain Exchange has seen similar gains over the last six weeks, which has led to a substantial price spread between hard wheat prices and soft wheat traded in Chicago. As of April 25, Kansas City wheat was trading at a $1.10 premium to soft winter wheat on the Chicago Board of Trade.
The soft red winter wheat crop in the Midwest and northwestern United States has received sufficient rainfall, alleviating concerns about this year’s production.
The spread could widen if drought persists in the U.S. southern plains and planting of spring wheat is delayed in North Dakota and the Canadian Prairies, said Joe Christopher, a grain dealer with Crossroads Co-operative in Nebraska.
“That will keep Kansas City strong in regards to Chicago,” Christopher told Reuters.
“How far can it go? If it got to be critical mass, you maybe take it to $1.75 in the (July future contracts).”
The price run up in Minneapolis and Kansas City is good news for wheat growers in Western Canada, but Darren Frank, a Farm Link Marketing Solutions market analyst in Winnipeg, isn’t sure if it will encourage farmers to plant more wheat this spring.
“I don’t think it will change the outlook (plans) they had a month ago,” he said. “Farmers probably made up their mind, ahead of this surge, on what their wheat acres are going to be.”
The Canadian Wheat Board is anticipating spring wheat acres to increase from last year, said Stuart McMillan, a CWB weather and crop analyst.
“This is supportive … (but) I don’t think we’re going to see a massive (acreage) swing based on this alone, simply because canola and other oilseed values have really been holding up throughout the late winter period.”
The drought in the southern plains will support wheat prices, McMillan added, but Canadian growers shouldn’t expect colossal gains because the U.S. has sizable stocks of hard red wheat.
“The one part that sometimes gets lost is that they have a pretty massive carryout of HRW … so that will temper some of the big jumps in wheat.”
Hodges said it’s hard to know if hard winter wheat prices can go higher, but it might be possible, considering that the winter wheat crop in Texas is worse off than Oklahoma.
“Right now, they’re probably (looking) at 40 percent of normal crop … or maybe even less.”
Oklahoma State University extension agronomist Mark Gregory knows first hand that less wheat is a likely outcome this year.
Based on reports he’s heard, winter wheat yields in southwestern Oklahoma will range from little to nothing.
“If we get the rain, we’ll make three bushels (per acre). If we don’t, we’ll make a half a bushel.”
According to National Agricultural Statistics Service data, southwestern Oklahoma received one millimetre of rain between March 1 and April 16, which is one percent of the typical precipitation in that period.
On April 25 the U.S. Department of Agriculture said the percentage of hard and soft winter wheat nationally in the poor to very poor classes increased to 40 percent from 38 percent the week before and only six percent last year.
The Kansas hard red wheat poor to very poor rating increased to 44 percent (42 percent the week before), Texas 72 percent (68 percent) and Oklahoma 75 percent (69 percent).
