Timely, unusual relief for winter wheat crop
June 21, 2016
The June winter wheat crop report from the U.S. Department of Agriculture almost never brings a surprise, but this year’s forecast proved an extraordinary exception. Looking back over the previous nine years, the Department’s June winter wheat total was within 2% of its May forecast, up or down, each and every year. This year, though, the June projection of 1,507 million bus is up 6% from May and up 10% from 2015. Looking as far back as 1980, there has never been such a great “June surprise.”
The larger crop projection is attributed to timely May rains believed to have meaningfully helped head filling during the crop’s final stage of development in some of the nation’s densest producing areas. The yield forecast of 50.5 bus per acre compares with 42.5 bus in 2015 and would be a new record high, blowing past the previous record of 47.8 bus per acre set in 1999. Early indications suggest the new hard winter wheat crop possesses excellent quality but lower-than-average protein levels. Soft red millers are hopeful that quality will be significantly improved this year.
The larger crop forecast has been credited with sharply lower prices. Wheat had been rallying through the spring with corn and soybeans, but recent setbacks have left wheat not too far above season’s lows. For bakers, this better purchasing environment represents welcome relief.