The U.S. winter wheat harvest may shrink to the smallest in five years as dry weather hurt crops in Kansas, Texas and other major growing areas, some analysts said prior to the government’s first estimate for the 2011 crop.
Jerry Gidel, an analyst with North American Risk Management Services, Inc., in Chicago, projected the winter wheat crop, which will be harvested over the next few months, at 1.378 billion bushels.
Gidel’s estimate is down 7.2 percent from the 1.485 billion bushels of winter wheat harvested in 2010 and would be the smallest crop since 2006, when production was 1.294 billion bushels, according to U.S. Department of Agriculture data.
The USDA is scheduled to release its first estimates for the 2011 winter wheat crop on May 11, and will also update its monthly supply and demand data the same day. The reports will be released at 7:30 a.m. Central time.
Also during the week, the largest U.S. meat processor, Tyson Foods Inc., and the biggest dairy processor, Dean Foods Co., are expected to report quarterly results. Tyson is scheduled to release results before the market opens May 9. Dean Foods is scheduled to report results the morning of May 10.
Crop scouts found dryness-stricken fields commonplace during a tour through Kansas, the top wheat-growing state, the week of May 2, analysts said.
Based on tour results released May 6, Kansas’ wheat crop was estimated at 256.7 million bushels, down 29 percent from the 360 million bushels harvested in 2010. The crop tour was organized by the Wheat Quality Council.
“Tour participants noted that a large part of the state’s crop is showing severe moisture stress,” Doane Advisory Services analysts said in a May 6 report, “And that unless good rain arrives within the next 10 days, yield potential will drop even further – and there’s little rain in the forecast for the driest areas.”
Unfavorable growing weather and declining supplies pushed prices for wheat, corn and other commodities higher this year, though markets tumbled sharply in early May.
In trading May 6, hard red winter wheat for July delivery in Kansas City rose 17 cents to $8.74 a bushel, after earlier falling to a six-week low at $8.45 ¼.
Hard red winter wheat futures, reflecting the variety most common in Kansas and other states in the Central and Southern Plains, in mid-February touched $9.90 ½ a bushel, the highest in nearly three years.
Traders and analysts will also check the USDA’s weekly crop progress reports May 9 to see if farmers made further headway in what has been a slow planting season so far in the Midwest. Unusually cold and wet weather has stymied fieldwork in many areas, stirring concern that late crops could hurt production during a year when U.S. corn stocks are heading toward 15-year lows.
As of May 1, the corn crop was 13 percent planted, down from 66 percent a year earlier and down from the five-year average of 40 percent for that date.
By May 8, corn planting is expected to be about 25 percent completed, Doane analysts estimated, and it’s unclear if weather in coming weeks will allow farmers to quickly catch up.
“Weather forecasts are for unsettled weather for the next ten days to two weeks,” Doane analysts wrote in a separate May 6 report. “Heaviest rainfall is expected in the eastern half of the Corn Belt. Acreage and yield are at risk from wet weather and planting delays.”
In trading May 6, July corn futures in Chicago fell 22 ½ cents to $6.86 ¼ a bushel, the lowest settlement since March 30. July soybeans rose 4 ¼ cents to $13.26 a bushel.
Analysts expect the USDA to make few changes to its projections for U.S. corn stocks later this summer.
In its April Supply and Demand report, the USDA estimated corn reserves at the end of the 2010-11 marketing year Aug. 31 at 675 million bushels, unchanged from a forecast in March but down 61 percent from supplies at the close of 2009-10.