Drought is hammering the western side of the American hard red winter wheat belt, shrinking the crop by a likely 20 million bushels, the United States Department of Agriculture said June 10.
But lower than expected U.S. wheat exports mean that 2004-05 wheat ending stocks will be down only four million bushels, the USDA said in its most recent agricultural supply and demand estimates.
Markets reacted by pushing down wheat prices because many analysts had forecast greater damage from the western drought than the USDA found.
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The drought is extreme in some parts of Kansas, a huge producer of winter wheat, and across much of Nebraska and through southern Montana. The Dakotas are less severely affected but are dry. Spring wheat crops in the Dakotas and Montana still have time to catch good rains and could improve their prospects, but the winter wheat crops in Kansas and Nebraska are near maturity and will soon be harvested.
The Kansas winter wheat crop has been suffering since it was seeded, with its expected yield continually downgraded by USDA. From a planting-time expectation of about 60 bu. per acre, it has fallen to 39 bu. The 2003 crop had a much sharper drop in expectations between planting and spring, but it recovered in the spring to end with a yield of about 48 bu. per acre.
Most other crops have avoided the western drought stress. The USDA report left unchanged its forecast for corn production, although it expected a drop in barley. USDA also did not change its expectations for oilseed production from last month’s estimate. It expects a U.S. crop of 80.7 million tonnes of soybeans.
