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U.S. farmers last fall reportedly planted their largest winter wheat area in eight years, but many of those added acres are in very poor condition due to drought, potentially minimizing their impact on production.

The U.S. Department of Agriculture on Monday pegged 28% of the U.S. winter wheat crop in good or excellent (GE) condition, the lowest for early April since 1996. That compares with 34% at the end of November and 30% at the start of April 2022.

Some 36% of U.S. winter wheat is rated poor or very poor (PVP), up from 26% in late November and equal to the same date a year ago. That is also the worst early April PVP rating since 1996.

USDA on Friday estimated U.S. winter wheat plantings for the 2023 harvest at an eight-year high of 37.5 million acres, up from 33.3 million last year, driven by elevated wheat prices last fall. This should in theory help lift domestic wheat stocks, which were at 15-year lows for the date as of March 1.

But conditions in some of the top states, where acres are up on the year, are concerning. Drought had curbed winter wheat production in 2022, and although drought is less widespread now versus a year ago, it has intensified in the hard red winter wheat (HRW) focused southern Plains.

Conditions

Only 16% of winter wheat in Kansas, which grows a quarter of the nation's winter wheat, is considered GE compared with 32% a year ago, 41% average for the date and 21% in late November. A whopping 57% of Kansas wheat is PVP versus 30% a year ago.

Winter wheat conditions (GE) in nearby HRW growers Oklahoma, Texas and Colorado are doing better than a year ago but are between 14 and 24 percentage points below average.

Kansas, Oklahoma, Colorado and Texas together accounted for two-thirds of the 4.2 million-acre increase in winter wheat plantings versus last year despite normally accounting for 43% of production.

Winter wheat in the Northwest, including Washington, Oregon, Idaho and Montana, also must be monitored as GE has fallen between 20 and 26 percentage points since late November. Ratings in all four states are well below average, though Montana and Oregon are in better shape than a year ago.

Those four northwestern states account for 24% of U.S. winter wheat output, but unlike the Southern Plains, the Northwest lost overall wheat acres from last year. The Northwest leads in white wheat production.

Soft red winter wheat (SRW) health is more encouraging, as GE conditions in many of those states are higher than a year ago and either near or above the five-year average. Illinois, Michigan, Ohio, Missouri and Indiana added nearly 1 million winter wheat acres versus last year, and those states account for 13% of total winter production.

Outlook

Favorable spring rainfall makes or breaks a winter wheat crop, but the next couple weeks are forecast to remain mostly dry in the heart of HRW country, including western Kansas.

For at least the last 37 years, U.S. winter wheat yields have never been above average if early April conditions are below 40% GE. Yields have come within 5% of average in a couple of those low-rated years (2011, 2013, 2018), but that was the less likely scenario and was probably based on improved spring weather and/or an imbalance in HRW versus SRW results.

Years where early April conditions were in the vicinity of this year's 28% GE usually resulted in a winter wheat yield around 10% below the long-term trend.

USDA's tentative U.S. all-wheat yield for 2023-24, given at its February outlook forum, is 49.2 bushels per acre versus 46.5 last year. Survey-based outlooks for winter wheat are usually offered in May, and those come in July for spring wheat.

Source: Reuters