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U.S. Winter-Wheat Crop Trails Forecast as Drought Cuts Output

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May 10 (Bloomberg) -- U.S. winter-wheat production in the year that starts on June 1 will be less than forecast by analysts after the worst drought since the Dust Bowl era did more damage than expected to crops in the southern Great Plains.

Output may total 1.486 billion bushels, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg survey forecast 1.494 billion bushels, on average. Production was 1.645 billion last year, USDA data show. Hard, red winter varieties grown in the southern Plains and soft, red winter grain sown in the Midwest account for about 70 percent of U.S. wheat output.

“The high Plains are still in a serious drought situation, and so you have stress on that crop,” Jacquie Voeks, a senior adviser at farm marketer Stewart-Peterson Group in West Bend, Wisconsin, said in a telephone interview before the report. “The high Plains had record low temperatures in the month of April and experienced four different serious freeze events. Ultimately, we will have a lower crop.”

Output is falling as the worst drought since the 1930’s caused winter varieties seeded in the fall from South Dakota to Texas to go into dormancy in the least-favorable condition since at least 1985, USDA data show.

Wheat futures on the Chicago Board of Trade through yesterday had dropped 7 percent this year, partly on speculation that global production will increase.

Output of hard, red winter wheat, grown in the southern Plains and used to make bread, will slump 23 percent to 768 million bushels from 1.004 billion last year, according to the USDA. Production of soft, red winter wheat, used in cakes and cookies, will be 501 million bushels, up 19 percent from 420 million bushels, the department said.

To contact the reporter on this story: Tony C. Dreibus at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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