Published on: 14:15PM Mar 03, 2009
Wheat Warrant’s Watching:
Allendale Inc is well aware of the fact two of the top four US winter wheat producing state’s crop condition ratings are far less than desirable.
Traditionally Texas ranks as the nations number four winter wheat producer with Oklahoma ranked second. As you are able to view the very poor wheat conditions within the state of Texas have nearly doubled since the beginning of the year and now stand at 38%. Over the most recent three weeks, the state’s wheat rated to fair and poor have remained mostly sideways. Most notably is the fact the states fair, poor and very poor wheat conditions now combine to total 90%, leaving only 10% in good to excellent status. Decision time is upon the state of Texas as spring field work moves forward, farmers are deciding whether to allow its winter wheat to pull out of its nosedive or replant with an alternative crop.
Number two US producer Oklahoma is also off to a less than enthusiastic 2009 beginning. The Sooner states amount of poor wheat has more than doubled from 17% to a present level of 29%. While Oklahoma’s condition of wheat rated fair has slipped 5%, its very poor conditioned wheat has increased from 3% to 13%. As of the completion of the month of February, the state now has 77% of its wheat rated fair, poor to very poor.
Weather conditions and forecast are less than optimistic for the Southern Plains as two week forecasted temps suggest swings of more than 25 degrees which may promote heaving while the present drought monitor suggest more than periodic rains will be required to dig out of harsh conditions. Principle key winter wheat producing states of Kansas, Oklahoma, Washington and Texas have a degree of abnormally dry to severe drought.
Consider the impact present conditions and weather may have on the future of 2009 hard red winter wheat production. Allendale Inc advises to consider building a long position in KCBT wheat once the July futures downtrend is breeched at a level of $5.84….Joe Victor
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