Are We Only One Disaster Away From Disaster?

06/01/11 -- Winter wheat conditions in the US are giving plenty of cause for concern, with the world looking to America to make up for Russia's unintentional shortcomings last year with a strong performance in 2011. Could we be just one more disaster away from a really BIG disaster?

Certainly US farmers have done their bit, encouraged by rising wheat prices to up their winter plantings by 12-14%, according to Allendale/Farm Futures Magazine.

It's the condition of these 42 million acres that is now giving cause for concern. The USDA have stopped giving weekly condition ratings, as is customary at this time of year.

In their last report at the end of November they pegged national all wheat crop conditions at only 47% good/excellent, a whopping 16 points below where things were twelve months previously.

Hard red winter wheat, of the type grown in the top wheat producing state of Kansas and which comprises nearly 60% of all US winter wheat, was rated 42% just good/excellent nationally, 39% fair and 19% poor/very poor back then.

A survey out by the Kansas Agricultural Statistics Service this week now pegs good/excellent conditions in the state at only 27% as at the end of December, with poor/very poor ratings having climbed to 33%.

This deterioration has largely been due to persistent dryness, with the state only getting 68% of normal rainfall October/December, according to Martell Crop Projections. Mercifully, relatively mild December temperatures have largely spared the crop - much of it unprotected by a blanket of snow - from significant winterkill damage. Up until now that is.

By the early part of next week however very cold polar air is forecast to push into central areas of the US, including Kansas, and by Tuesday January 11 the minimum temperature outlook is very cold indeed with temperatures some 10-20°F below normal.

Unless unprotected Kansas gets a beneficial snowfall before then, things could easily go from bad to a whole lot worse for the state's wheat growers. And that could knock another chunk off the global production bottom line, one that is already 20 MMT behind projected consumption in 2010/11.