Fundamentally Speaking

Winter wheat conditions barely improved this week, up 2% in the combined good or excellent categories to 28% and this is just ahead of the year ago 27%.

On the other hand, wheat rated in either poor or very poor condition is actually up 1% to 42% this past week, again just slightly better than the year ago 43% either in poor or very poor shape.

The abysmal state of the 2023 U.S. winter wheat crop, especially the hard red winter variety, seems lost on the market as Kansas City wheat futures are trading at the lowest levels in at least 18 months.

Perhaps some stabilization will occur ahead of the USDA's first crop production report next week where already a below trend yield and planted to harvested acreage ratio seems assured.

This graphic shows the conditions for the U.S. winter wheat crop right around May 1 using our usual ratings system where we weight the crop based on the percent in each category and assign that category a factor of 2 for very poor, 4 for poor, 6 for fair, 8 for good, and 10 for excellent and then sum the results on the left-hand axis.

On the right-hand axis is the percent of the 1986-2022 trend of the USDA's May estimate of the U.S. winter wheat yield along with the final harvested to planted ratio.

USDA has been keeping crop ratings since 1986 and this year's 540 crop rating as of May 1 (2023 figure is actually 4/30 number) is fourth lowest of all-time next to last year's 530 rating, a 444 rating as of 5/1/1996 and the lowest at 328 back on May 1, 1989.

Last year's May yield estimate at 47.9 bushels per acre (bpa) was just 96.6% of the 1986-2022 trend and eventually fell to 47.0 bpa which was 93.1% of the trend of final yields.

Even more noteworthy was the final harvested to planted ratio of 70.5% which is the lowest such ratio at least going back to 1986.

2002, which had a very low May 1 crop rating of 543, is the second lowest at 71.2% with 1996 at 76.9% and 1989 at 75.3%.

These two seasons also had some of worst May yield estimates relative to trend ever.

As noted, wheat market has been pressured by some of the best rains areas of the Plains have seen in months but barring a sudden turnaround, it appears 2023 U.S. winter wheat crop is again looking at a well below normal harvested to planted area ratio and well below trend yields also.

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