The News & What it Means – A Big Bounce Back Year for US Spring Wheat?

By John DePutter & Dave Milne – June 19, 2018

 

The news:

“An estimated 78% of the US spring wheat crop was in good to excellent condition as of Sunday, up 8 points on the week and well ahead of last year’s 41% good to excellent rating.”

– Syngenta website article, June 18, 2018

 

What it means:

Of course, it’s still early and the crop is a long way from the bin. But as with corn and soybeans, good crop condition ratings increase the chance of higher yields and larger production.

 

The most notable aspect, however, is that American spring wheat output this year was already poised to increase dramatically, even without the probability of higher yields.

 

Spring wheat acres up

As most producers will remember, the USDA surprised traders and analysts back in late March when its prospective plantings report pegged intended US spring wheat seeded area at 12.6 million acres, up a hefty 15% from the previous year. Now, there is certainly some question as to whether spring wheat seeded area actually got that high, but it’s fair to assume it is up from the previous year.

 

As it stands today, the USDA is projecting total 2018 American wheat output at 1.827 billion bu, with an estimated 1.197 billion bu of that coming from this year’s winter wheat crop. That leaves combined spring wheat and durum production for this year at about 629.28 million bu, up a major 33.5% from the 2017 combined crop of 471.14 million bu.

 

And given that US durum seeded area this year is projected down 13% at 2 million acres, it’s clear the USDA is expecting a big rebound from last year’s drought-reduced spring wheat crop.

 

The question now is how big that rebound will get.

 

Weather improving

This week’s big improvement in the spring wheat condition can be attributed to recent moisture, with much of the Dakotas getting anywhere from a ½ to 2 inches of rain this past week. Large areas of abnormal dryness and drought still persist in the main spring wheat production state of North Dakota, but crops have responded well to the rain.

 

In fact, the condition of the North Dakota crop jumped 9 points from a week earlier to 80% good to excellent as of Sunday. That compares to a year earlier, when increasingly dry weather had forced the state’s mid-June spring wheat crop condition rating down to just 42% good to excellent.

 

Meanwhile, the 8- to 14-day forecast looks good for North Dakota and Western Minnesota especially, as can be seen here.

 

 

Production poised to grow

In its next supply-demand update on July 12, the USDA, will release its first survey-based projection of other spring wheat and durum (not desert) production for the 2018-19 marketing year. If the weather stays relatively good until then, the US spring wheat production forecast could represent a very big bounce back year indeed.

 

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