Every year, roughly 100 scouts take a few days to tour wheat fields in Kansas (as well as parts of Oklahoma, Colorado, and Nebraska) on the Wheat Quality Council's hard red winter wheat tour.
The purpose of the tour is to get as many samples as possible across the main growing area for winter wheat and (utilizing region-specific formulas) calculating an estimated yield for the crop. By this time of the growing season, the samples give a fairly good idea of what the crop looks like. Is it too dry? Too wet? Is the development behind or ahead of normal?
All of these questions are usually answered by the tour ahead of the May USDA World Agriculture Supply and Demand Estimates (WASDE) report. But this year the scouts experienced a once-in-a-generation May snowstorm.
In western Kansas during the second day of the wheat tour, scouts had trouble getting into fields on many occasions due to standing water and snow covering the crop. While the pictures circulating on social media painted a rough picture, the narrative coming out of the evening meeting suggested that much of the crop was covered by the snow from freezing winds, and in most cases, the resilient wheat crop did not snap and break, but will likely keep its stand as the snow melts.
Much of the bullish market move from the last week was based on fears of crop damage that likely is overdone. And while lower than a year ago, the tour's yield estimates have not been disastrous by any stretch (even with the weather issues).
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Wheat
The aforementioned snow in the winter wheat growing areas of the U.S. has been the main story and market support, this week. However, prices are slowly coming off due to the realization that damage to the crop may not be as bad as initially feared. In other wheat market news, planting of the spring crop continues to lag normal pace, according to the USDA's weekly report. Thirty one percent of the crop has been planted compared to the average 46 percent. Winter wheat conditions were not changed from a week ago, with 54 percent of the crop rated good/excellent. This is below last year's amazing crop rating of 61 percent good/excellent. The Wheat Quality Council tour of the hard red winter crop showed that overall wheat plantings are down. Specific fields that have been sampled for decades simply were not planted this year. This is an indication of the true drop in total planted area for wheat (at its lowest level in over 100 years).
Durum
Durum markets have not moved much for the last several months. Planting efforts are underway, with 13 percent done in North Dakota compared to 15 percent for the average pace. There has not been much else driving the durum market in the last week.
Canola
The near-term issue for canola is the tight physical supply for old crop. Demand has been strong and production was not great in the fall due to harvest issues in Canada. With tight supplies and higher prices/returns compared to other alternative crops, area is expected to explode. This was covered in last week's look at the Statistics Canada planting intentions. However, weather has been a little too wet for planting to start. While farmers still have some time before abandoning planting plans, the rains have been a concern. An improved forecast for warm and dry conditions are relieving some of these fears, but they must be realized so that farmers can get out and plant.
Peas and lentils
Pulse growers and buyers are taking a cautious approach as the markets head into the 2017 growing season and begin to even think about 2018. Large supplies are known due to expanded area in 2016 in the U.S. and Canada, as well as huge crops in India. But the big expansion in area (especially in India) has pressured the market. And even though the Indian government is trying to increase area, this will become difficult given that prices have fallen below support levels.
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Mustard
Mustard seed exports have maintained their slow pace, with the Canadian Grains Commission reporting just 500 metric tons cleared in the last week. With little movement on the export side, the market has had little to be excited about.
Barley
Barley planting efforts continue to lag the normal pace in the U.S. In the weekly Crop Progress and Conditions Report, the USDA reported 32 percent of the crop planted compared to 53 percent for the five-year average. Rains have kept fields wet and difficult for farmers to get work done.
