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Market Commentary

Midday Report 05/22


There seemed to be little fresh news concerning wheat Wednesday morning, although some traders may have responded to a private forecast of 2013/14 global production below the recent USDA prediction. Otherwise, the golden grain markets almost surely benefited from concurrent corn gains. July CBOT wheat futures leapt 10.0 cents to $6.905/bushel in Wednesday morning trading, and July KCBT wheat advanced 9.5 to $7.48, whereas July MGE futures declined 2.25 cents to $8.1125.
Market Info

The relationship of pasture, range conditions and wheat yields

Doane Advisory Services  |   September 24, 2012
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The drought has hit the hard red winter wheat growing area extremely hard this year, and USDA data shows that pasture and range conditions heading into the fall wheat planting season are the poorest in a long time. We won’t start getting winter wheat condition ratings for a few more weeks, but we decided to look at the Mid-September pasture and range condition ratings to see if they provide a good indicator of wheat yields the following summer.

click image to zoom The analysis was done on four major hard red winter wheat producing states, i.e. Kansas, Texas, Oklahoma, and Colorado. If we weight the pasture and range condition ratings by their share of wheat production the data shows 80 percent in the poor or very poor categories. This is the worst conditions in the last 13 years. Last year was the second poorest rating since 2000 with the weighted index showing 68 percent in the poor or very poor categories. Conditions were horrible in Texas and Oklahoma in September, but late fall rains really helped the winter wheat crop. In fact, winter wheat yields in the four states came in about 3 bushels above trend when the crop was harvested this summer.

The relationship between pasture and range conditions in mid-September and the following year’s actual yield is extremely weak. Weather after the middle of September is much more important to wheat yields and often conditions improve in the falls following dry summers. Even with the very low pasture and range conditions ratings, it is too early to determine what 2013 winter wheat yields will be.

 


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