The condition of US hard red winter wheat seedlings deteriorated further, amid relatively warm and dry weather – but prospects for the soft red winter wheat crop appear less downbeat than a month ago.

The proportion of winter wheat rated "good" or "excellent" in Kansas - the top US wheat-producing state, and a grower of hard red varieties – fell by three points to 46% last month, the US Department of Agriculture said.

In neighbouring Oklahoma, which vies with Washington for second place in winter wheat producing states, the proportion of crop seen as good or excellent tumbled by 13 points to 41%.

And in Colorado, also a hard red winter wheat state, the rating plunged by 24 points to 38%.

Nebraska, also a hard red winter wheat state, bucked the downward trend with a four-point rise to 61% in the proportion of its crop placed as good or excellent.

'Needed more moisture'

The decline in condition came amid dryness in the US South which - while much reduced from the early-2013 levels of more than 60%, as the country was emerging from its worst dry spell in a generation - has kept 31.3% of the region in drought.

A year ago, the figure was 31.8%.

In Kansas, about half of soil is seen as short of moisture, while in Oklahoma the figure was 60% after "all districts [saw] below-normal precipitation levels throughout January", USDA scouts said.

In parts of central and north eastern Oklahoma, "wheat producers needed more moisture to sustain forage and root development".

In Colorado, scouts said that "as snow cover protection was limited by warm temperatures, a decline in winter wheat conditions was realised".

Snow cover is seen as helpful to winter wheat seedlings in, besides providing moisture reserves, it protects crops from temperature swings and night-time frosts.

USDA scouts in Nebraska said that a "snow storm at the end of the month brought welcome moisture to most eastern areas and provided the wheat crop with cover".

Illinois recovery

However, the decline in wheat ratings in southern hard red winter wheat areas contrasted with an improvement in the crop in Illinois, a major grower of soft red winter wheat - the type traded in Chicago.

The proportion of Illinois seedlings rated good or excellent soared by 25 points to 49%.

Despite January precipitation coming in some 20% below typical levels, only some 5-6% of the state was seen as being short on soil moisture.

In Kentucky, also a soft red winter wheat-growing state, where precipitation was below average in January for a third successive month, the proportion of crop rated good or excellent fell by four points, but to a still-elevated 78%.

Market reaction

Chicago soft red winter wheat stood 0.9% higher at $4.97 a bushel in early deals, while Kansas City-traded hard red winter wheat gained 0.9% to $5.34 ј a bushel, amid some concern over the crop ratings.

"The condition of US winter wheat crops to date may leave much to be desired," said Brenda Mullan, analyst at the UK's HGCA crop bureau.

While crops in states such as Kansas and Nebraska have received some snow to protect against cold weather "with tumbling temperatures expected to hit the parts of the northern and central Plains this week, the US wheat crop is susceptible to further concerns of frost damage," Ms Mullen said.

While still early in the growing season, "the fact that the Plains have seen reduced conditions so far, coupled with further cold snaps, could have the potential to add support to the downward trending market".

Source - http://www.agrimoney.com