Wheat In A Make-It Or Break-It State
May 09, 2011
With the Kansas Wheat Tour wrapping up it's survey there seems to be more concern over the weekend that the wheat crop is truly at a make or break crossroads. Most now confirming that if rain doesn't fall in the next few days the US wheat crop could be in serious trouble. Many producers that I have spoke with have already abandoned their wheat fields and several have already signed off on the insurance. Many others are borderline and their fate will be determined in the next two weeks at the latest. The tour determined that that average estimated Kansas wheat yields would be somewhere around 37 bushels per acre. That is down almost 4 bushels per acre from last years estimate. I have heard several rumors that many of the guys in the tour feel they have the average number three or four bushels too high, and that Kansas will actually come in below 35 bushels per acre before it is all said and done. There has been some recent criticism going around that the Tour generally estimates the crop too low, so maybe they are erring to the high side this time around. All I know is that the crop is at a very critical stage and rainfall is going to be highly critical. The trade will certainly be watching intently as the temps really start to heat up. Don't forget the USDA will take their first stab at winter wheat production on Wednesday, and as far as I am concerned all bets are off in regards to final production numbers. There are just too many variables in the air right now concerning abandoned acres, drought conditions, excess rainfall in some areas, planting delays, etc... I am worried that if the rains come, traders will be very quick to take premium away in a real hurry. The fears that Russia, India, Argentina, and Australia will all be back in the exporting game is certainly weighing on the market. Without the weather concerns, I have to believe we would be significantly lower... If you like gambling on the weather then this is your market for the next few days. If your a producer and have very little sold you may want to take advantage of any rallies that come our way during the next couple of weeks.
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