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A Slow Start for the 2020 Wheat Crop

Cool temperatures and dry conditions are leading to a poor crop so far. How will the market react?

From many a roadside in the High Plains, the 2020 winter wheat crop leaves a lot to be desired, with fields that look freshly planted rather than bright green and lush. 

Justin Gilpin, chief executive officer of Kansas Wheat, says cold temperatures and dry conditions are hurting the crop’s establishment. 

“There’s a spot in southwest Kansas, there is . . . nothing out there. It’s pretty dry,” Gilpin says. “It will be interesting to see how it overwinters without tillering.” 

According to the November 18 Crop Progress Report from USDA, winter wheat condition fared poorer than the previous week. Nationwide, the crop is rated at 14% very poor/poor (down 1%); 75% fair/good (down 1%) and 11% excellent (same as previous week). 

But in the key winter wheat producing states of Kansas, Oklahoma, Texas, and Colorado, conditions slid even further. 

In Oklahoma, like Kansas, declining crop conditions are a function of several factors, says Mike Schulte, executive director of the Oklahoma Wheat Commission. Farmers typically plant wheat early in order to graze wheat pasture, but it was dry during the fall.

“They planted later, waiting for moisture. The combination of later planting and cold temperatures after planting have set the crop back,” Schulte explains. “It’s just not growing as fast as normal.” 

Across the Belt, warmer temperatures this week would normally help the crop get established. Yet, dry conditions are thwarting the crop’s growth. 

“We’re supposed to get moisture this week, but it’s also supposed to turn cold,” Schulte says. 

The combination of dry topsoil and cold temperatures could be a problem, adds Romulo Lollato, small grain specialist at Kansas State University. 

“Poor root development is a concern where conditions have been dry. Where wheat plants have a good crown root system and two or more tillers, they will tolerate the cold better,” Lollato said in a news release provided by KSU. 

If plants are poorly developed going into winter, with very few secondary roots and no tillers, they will be more susceptible to winterkill or desiccation, especially when soils remain dry. 

“Poor development of secondary roots may not be readily apparent unless the plants are pulled up and examined,” Lollato says. “If secondary roots are poorly developed, it may be due to dry soils, poor seed-to-soil contact, very low pH, insect damage, or other causes.”

Fewer Acres

Not only is the wheat behind in terms of establishment, but expectations are for far fewer acres of winter wheat planted. 

  • Schulte says Oklahoma planted 4.4 million acres in fall 2018, and farmers harvested 2.7 million acres in 2019. He anticipates 2019 planted acres will be far less than last year’s total.
  • In Kansas, farmers planted 6.9 million acres in fall 2018 and harvested 6.6 million acres of wheat in 2019. That’s down 800,000 acres the year before. Kansas Wheat’s Gilpin estimates farmers will continue to plant fewer wheat acres this fall. 
  • The 2020 wheat crop in Texas and Nebraska will be down to 4.1 million acres from 4.5 million acres, according to estimates from Texas A&M AgriLife.

Market Implications

The U.S. has had four straight years of decreasing wheat ending stocks, and is near going below one billion bushels. Ending stocks of winter wheat in particular are below 500 million bushels, according to Naomi Blohm, senior marketing advisor with Total Farm Marketing. All of this bullish news begs the question: Does the wheat market care about bearish news in the U.S. crop?

Demand for feed wheat will likely increase dramatically in 2020, Blohm says. Plus, the Eastern Corn belt is Corn deficit due to the horrible growing season and as a result, Midwest corn is being sent eastward. Test weights for corn across the country for corn are coming in extremely low – therefore it will take more corn to use in feed. 

"Basis across the country is already reflecting this corn demand, and there will come a time when the livestock grower will say 'enough is enough' and start to use more wheat as a substitute for feed where applicable," she says.

Plus, China has been buying U.S. wheat recently, she adds. Factor into this global equation that Australia and Argentina wheat crops are smaller. U.S. farmers are growing the least amount of wheat in a century, and boom. There could be opportunities ahead.

"We are setting the stage for the potential for a rally in 2020," Blohm says. "Now, keep in mind global ending stocks are sufficient overall, so if the rallies come, be sure to capture that opportunity."

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