Kansas Wheat Crop Seen Rebounding 19% to Add to Global Surplusby
Second straight year of rain offsets 7.6% drop in area planted
Chance for best-ever crop if cool. dry weather prevails
The wheat harvest in Kansas will rebound 19 percent this year, according to findings from a crop tour, meaning favorable weather in the largest U.S. grower of the grain will likely exacerbate a global glut.
Output will rise to 382 million bushels, according to the average estimate of participants Thursday on a three-day annual crop tour organized by the Wheat Quality Council. That compares with the U.S. Department of Agriculture’s 2015 estimate of 322 million, after growers planted 7.6 percent less last September. Before the tour, the average of analysts’ estimates compiled by Bloomberg forecast that output would drop to 319 million.
Showers in April revived crop prospects across the state and helped farmers avoid a developing drought, while above-normal temperatures warmed soil in February and March to prevent three separate freezes from damaging immature plants. Wheat prices are near the lowest since June 2010 after bumper harvests in the European Union, Russia, Ukraine and India pushed global reserves to a five-year high. Grain gluts are helping to keep world food costs in check.
“This year’s crop has the potential to be one of the best ever,” said Ben Handcock, the retiring 25-year executive vice president for the Wheat Quality Council. “It was better than expected, with limited freeze damage and plenty of fungicide applied to prevent disease. Farmers did a very good management job to preserve yield.”
About 52 percent of Kansas winter wheat crop was rated in good or excellent condition on May 1, almost twice the total a year earlier and the highest for the date since 2012. In some parts of the state, rain the past 30 days was more than four times the average.
The showers will help boost yields this year to an average 48.6 bushels an acre, the results of the crop tour showed. That’s up from 35.9 bushels estimated on the tour last year, and compares with the USDA’s final estimate of 37 bushels.
The Wheat Quality Council, based in Brighton, Colorado, organized the tour for more than 80 analysts, farmers, flour millers and grain traders. They stopped at 655 fields in Kansas and parts of Oklahoma and Nebraska.
Wheat futures for July delivery fell 1.7 percent to close at $4.6325 a bushel Thursday at 1:20 p.m. on the Chicago Board of Trade. Prices have slumped 24 percent since the end of June.
Bigger yields for Kansas crops coupled with favorable conditions for fields from Texas to Nebraska will help boost total U.S. winter wheat production, analysts predict. The 2016 crop will probably rise to 1.372 million bushels from 1.37 million a year earlier, according to the average of 26 estimates in a Bloomberg survey. The USDA will release its first estimates of the season at noon on May 10 in Washington.