U.S. Rains Rescue Kansas Wheat From Second Drought Disaster

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David Schemm isn’t complaining that a deluge last month made soils too wet to plant corn because his 4,500 acres of wheat in west-central Kansas will probably be the best crop in four years.

“There were cracks in the soil and plants were starting to turn yellow because of the dry weather during the winter,” said Schemm, 44, who farms near Sharon Springs. “Survival of my crop was down to hours, not days.”

Rains in April worked to revive crop prospects across Kansas, the biggest U.S. wheat producer, and helped farmers escape a second year of drought losses. In 2014, dry weather shriveled plants and the harvest fell to the lowest since 1989. Production this season will probably jump 21 percent to 298 million bushels, the first increase in three years, according to the average of 16 analysts surveyed by Bloomberg.

Wheat prices are near the lowest since July 2010 after bumper harvests in the European Union, Russia, Ukraine and India pushed global reserves to a five-year high. More world supplies mean that demand is waning for shipments from the U.S., the world’s top exporter. Grain gluts are also keeping global food inflation in check, with costs tumbling 19 percent in the past 12 months.

For Kansas grower Schemm, April rains that were more than double the average mean that his yields this season should climb to 40 bushels an acre from 22 collected on average last year. That trend will be mirrored across the eastern half of the state, and will help push total U.S. winter-wheat production up 7.7 percent to a two-year high, the Bloomberg survey showed.

Kansas Tour

More than 90 traders, farmers, grain buyers, flour millers and bakers, including representatives from Grupo Bimbo SAB, Archer-Daniels-Midland Co. and General Mills Inc., will tour fields across Kansas beginning Tuesday to measure production potential during the annual Wheat Quality Council Tour. The group will issue a crop forecast for the state on May 7, and the U.S. Department of Agriculture issues its first estimate on May 12.

“Wheat was headed for half a crop at the end of March, and it is adding bushels at the end of April,” said Troy Presley, grain manager for Comark Grain Marketing LLC in Cheney, Kansas, the marketing division for 12 cooperatives with more than 70 locations in Kansas, Oklahoma and Nebraska. “April rain probably added 5 bushels an acre” to yields in Kansas since March, and more rain this month could add another five, he said.

Rains also aided crops from Texas to Nebraska, and U.S. production of hard-red wheat could climb as much as 15 percent this year to 850 million bushels, according to Ryan Caffrey, the senior wheat merchandiser for CHS Inc., the largest U.S. cooperative. Futures have slumped 40 percent in the past year and traded at $4.96 a bushel on the Chicago Board of Trade on Monday.

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