Concerns grew over the quality of US soft red winter wheat, with some termed by officials of such poor calibre “it is not able to be sold”, thanks to rains which continued to delay harvesting of the grain.
US farmers had harvested 75% of their winter wheat crop as of Sunday, a rise of 10 points week on week, the US Department of Agriculture said.
While a little behind the advance of 11 points that investors had expected, the figure took the progress above the average, of 74%, for the first time this season, which has been noted for rains which after affecting initially the southern Plains hard red winter wheat region has provoked notable setbacks in Midwest soft red winter wheat country.
Indeed, the overall harvest figure disguised a sharp difference in progress between southern Plains states, such as Kansas and Oklahoma, where farmers are about on track with harvesting and Midwest states such as Indiana and Ohio where growers are notably behind.
By contrast, farmers in the US North West, in Oregon and Washington, have made an unusually rapid start to harvesting of their mainly white winter wheat crop, thanks to unusually dry weather which is continuing to take a toll on crop condition.
‘Scab, sprouting and mould’
The wet Midwest weather has, besides slowing harvesting, prompted increasing concerns over quality, with moisture on ripe grain encouraging sprouting, and lowering protein levels, besides fostering disease.
In rain-plagued Indiana, USDA scouts noted that farmers “found a little window to harvest reported wheat of low quality.
“There have been reports of elevators rejecting wheat loads due to the presence of vomitoxin,” a toxic fungal residue, known in Europe as Don.
“Winter wheat left unharvested continues to have quality issues, including problems with scab, sprouting and mould,” the scouts added.
‘Not able to be sold’
In Michigan, official scouts said that “intermittent rain showers limited the amount of winter wheat harvested this week – moisture levels were reported as high, and some growers reported vomitoxin issues”.
And in Ohio, USDA staff said that “Some wheat has been of such poor quality, it is not able to be sold.
“Wheat condition in some areas is very poor, as the heads have been exposed to excessive rainfall for the past several weeks.
“Some wheat that has been harvested, has had low test weights, high levels of vomitoxin, and very high moisture content.”
The comments follow a harvest report on Friday from US Wheat Associates, which promote US wheat exports, which highlighted declines in some quality measures, prompting latest samples to be graded 3 rather than the 2 the previous week.
“The low test weight value in the composite sample graded this week reduced the average grade to a No 3,” the group said, albeit adding that “grade data is still very preliminary”.
The test weight came in at 56.9 pounds per bushel (74.9 kilogrammes per hectolitre) compared with an average of 58.1 pounds per bushel (76.5 kilogrammes per hectolitre) for last season’s crop, which was itself of modest quality.
Protein levels, at 11.4% dry basis, are actually running above the 11.2% final result for last year’s crop, although levels can be supported by wet weather, as occurred with the UK’s deluge-affected 2012 harvest, which ranked low on other quality parameters.
There are mixed ideas on the impact of the poor quality harvest on futures prices, with some investors seeing support for values of grain able to make the grade for delivery against Chicago futures.
However, at Chicago broker RJ O’Brien, Richard Feltes, noting “reports of dismal soft red winter wheat quality across Illinois, Indiana and Ohio”, flagged pressure on prices from a “dismal” outlook for export demand for the grain.
The growing proportion of soft red winter wheat used as feed is also likely to undermine values, in particular in comparison with corn.
“Look for December wheat futures to erode further versus December corn even though the spread is historically narrow, the low $1.20s a bushel area,” Mr Feltes said.
“The wheat market will be forced to track even lower to buy feed demand away from corn.”
(Source – http://www.agrimoney.com/news/fears-mount-over-dismal-quality-us-soft-wheat-crop–8592.html)