A yearlong drought from Kansas to Texas has created the driest conditions on record for farmers preparing to plant winter wheat, dimming crop prospects for a second straight year in the U.S., the world’s largest exporter.
Dry weather already has cut output of hard, red winter wheat, the most common U.S. variety, by 22 percent from 2010, government data show. If drought persists into the planting months of September and October, next year’s harvest will be even smaller, and prices on the Kansas City Board of Trade may jump 50 percent to $13 a bushel, said Dan Manternach, a wheat economist with researcher Doane Advisory Services in St. Louis.
In Texas, where agriculture losses from the drought were a record $5.2 billion, soil moisture is so depleted that plants may not emerge from the ground without more rain, Texas A&M University said in a report yesterday. Kansas, Texas and Oklahoma were the biggest growers of winter wheat in 2010 and supplied 28 percent of all wheat varieties produced in the U.S.
While global supplies are rising as exporters in Russia and Eastern Europe recover from a drought in 2010, Kansas City wheat futures that closed yesterday at $8.6525 a bushel may jump to $10 by the end of September, Doane’s Manternach said. If drought spurs farmers to plant fewer acres than last year in the Great Plains, the largest U.S. growing region, or a winter freeze damages crops, prices may reach $13 by March, the highest price since 2008, he said.
Read more at http://www.bloomberg.com/news/2011-08-24/drought-baked-fields-curb-2012-u-s-wheat-outlook-as-prices-gain.html
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