The pace of winter wheat seeding in the United States is much slower than normal, particularly in the key state of Kansas.
Nationally, winter wheat seeding as of Oct. 22 was 75 percent done compared to the five-year average of 80 percent.
In Kansas, only 67 percent was in the ground, down from the average of 86 percent.
Kansas, which produces 26 percent of the U.S. winter wheat crop, has had a lot of rain recently, 100 to 150 millimetres in the past 30 days in some western areas. So that slowed seeding progress.
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But another factor could be that farmers just don’t want to plant winter wheat.
The discount of Kansas hard red winter wheat futures relative to Minneapolis spring wheat is not quite as wide as in the summer, but at about $1.80 per bushel it is still the widest since the fall of 2011.
U.S. hard red winter stocks-to-use is a burdensome 56 percent and soft red winter stocks-to-use are a whopping 74 percent.
The strong American dollar makes it hard for U.S. wheat exports to compete against countries with weaker currencies.
Farmers in Kansas and Oklahoma might want to take their chances with other crops with potential for stronger returns, such as winter canola, or wait until next spring to seed corn, soybeans or sorghum.
We have to wait until January to get the USDA’s survey on planted winter wheat, but fewer acres won’t be a surprise.
The declining interest in winter wheat is not new. The crop seeded for the 2017 harvest nationally was down 24 percent from five years before. In Kansas it was down 20 percent.
The pace of the decline is increasing. Nationally, the acreage decline between 2014 and 2015 was 6.4 percent, between 2015 and 2016 was 8.9 percent and between 2016 and 2017 it was 9.6 percent.
I should note that acreage decline does not necessarily mean production decline. The crop harvested in 2016 had record smashing yields and was the largest since 2008.
Area nationally planted to winter wheat last fall at 32.7 million acres was already the smallest since 1909’s 29.2 million. If planting drops again by eight or nine percent, the total area will drop below 30 million acres.
People in the market are talking about an acreage decline, but it is not helping the wheat price much. Supply, in the U.S. and globally, is simply too comfortable to make buyers nervous.
The supply of quality hard red spring wheat is less burdensome and so its price is a bit more attractive.
But the large supply of other classes is a limiting factor for all wheat prices, as is the large harvest of American corn that will compete on the feed end of the market.
While U.S. acreage declines are met with a shrug, there is an outside chance that the looming La Nina could lower U.S. yields.
Weather agencies around the world forecast about a 55 to 65 percent chance of a weak La Nina developing by the end of the year.
La Ninas in the past have brought mild, dry weather to the southern third of the U.S. that harms winter wheat.
But as I’ve already mentioned, there has been a lot of rain this fall in the U.S. southern plains and there is good soil moisture.
There is a chance that moisture could carry the crop even if precipitation is below normal over the winter, just like stored moisture helped crops on the Canadian Prairies this summer.
