Fundamentally Speaking

There has been increased consternation about the fate of the 2016/17 U.S. winter wheat crop, especially the hard red winter (HRW) variety, as worsening drought conditions impact large sections of the Central and Southern Plains.

Furthermore, the trade is trying to get a handle on how much damage was sustained from a freeze event in late March occurring when a small portion of the HRW crop was in the joint stage.

It was quite a surprise when the USDA reported that winter wheat conditions had actually improved from last fall when they issued the first spring condition report this week that showed U.S. winter wheat conditions as of the beginning of April the best in six years.

Using our usual ratings system where we weight the crop based on the percent in each category and assign that category a factor (2 for very poor, 4 for poor, 6 for fair, 8 for good, and 10 for excellent and then sum the results), this week's rating comes in at 722 which is actually higher than the last fall rating of 710 and well above the year ago 662 and is the highest since the 742 reading in April 2011.

Both the last fall and first spring winter wheat ratings are plotted in this graphic along with the percent that the USDA's May yield estimate deviates from the 1987-2015 trend of final winter wheat yields.

It is hoped that this year's yield is better than the 2014 yield of 43.1 bushels per acre (bpa) or the 2015 yield of 43.5 bpa which respectively are 8.9% and 8.8% below trend which, next to the 12.2% negative deviation from trend in 1996, are the largest ever.

Many agronomists say that excellent subsoil moisture reserves have helped carry the crop for now but good amounts of rain are needed from this point forward to assure that yields are at least on trend which this year calculates to be 48.0 bpa.

(KA)