Market takes wait-and-see approach to Kansas’s big freeze

Temperatures fell to -5 to – 9 C on the mornings of March 19 and 20 in western Kansas and Oklahoma.

The weekend temperatures were cold enough for long enough to damage jointing wheat.

Little winter wheat would normally be at that stage, but the crop was advanced because of unusually warm weather in recent weeks.

Temperature highs were expected to jump to 24 C March 21 and the high 20s March 22, which should cause damage to become evident quickly.

Farmers who had inspected fields were talking on agriculture discussion sites about damage on plants that had growing points above ground.

About 20 percent of the hard red winter wheat crop was severely damaged, said INTL FCStone analyst Arlan Suderman in a note to clients.

However, the Kansas City hard red winter wheat contract increased only one percent March 21 as traders waited for more information.

Kansas wheat had already rallied 25 cents per bushel from lows that were hit early this month, supported by concern about dry weather in the hard red winter wheat region.

Wheat rallies make it hard for American exporters to compete on the world market.

U.S. exports this year are the slowest in 44 years because the strong U.S. dollar hurt American wheat competitiveness.

Year-end U.S. wheat stocks are forecast to rise to 26.29 million tonnes, up 28 percent from the previous year and a 29-year high.

Global wheat supply is also ample.

These factors are a heavy anchor on wheat prices, and the trade appears disinterested in sparking a serious rally without confirmation of major damage to the winter wheat crop.

The adage is that winter wheat has nine lives, ever able to bounce back from various stresses.

Even freeze-damaged wheat can send out new tillers, but the crop will need moisture to revive, and the forecast for the rest of March looks fairly dry. However, the long-term May-July outlook is for average to above average rainfall.

The crop could face additional significant frosts.

A medium-range forecast says temperatures in central Kansas could again fall to -8 C April 4, which will bear watching.

As I have reported before, crops are also threatened in India, where recent rain and hail just before harvest added to crop problems that were already evident from a below normal monsoon and below normal winter rain.

Wildly differing forecasts for the wheat crop are appearing in Indian newspapers.

India’s association of chambers of commerce said last week that the wheat crop could fall to 81 million tonnes from 86.53 million last year and 95.85 million the year before that.

However, the country’s agriculture minister, Radha Mohan Singh, said 92 to 93 million tonnes were still possible.

The Indian pulse crop is equally uncertain.

G. Chandrashekhar, a leading expert on Indian pulse markets, said in an email that the winter desi chickpea crop might have been trimmed by five percent be-cause of the recent rain, but overall production is still expected to be higher than last year’s 7.3 million tonnes.

He said the rain this year has been much less damaging than the storms last year at this time, which drove production down a million tonnes from a previous forecast of 8.3 million.

The country’s food minister, Ram Vilas Paswan, told parliament that pulse imports this fiscal year would total 6.5 million tonnes, up from 4.5 million the previous year.

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