Drought intensifies, US winter wheat conditions deteriorate: USDA

Drought across North America is putting pressure on the condition of an already-damaged winter wheat crop, the USDA said in its monthly Wheat Outlook report Monday.

“With the last significant precipitation occurring about [four] months ago, drought in the Southern Plains is intensifying, causing further deterioration in the condition of winter wheat,” the report said.

Drought has intensified across the country, with topsoil moisture in Kansas and Oklahoma “noted as very short to short on 79 and 93 percent of acres,” while in Colorado the crop is “stressed due to windy conditions and a general lack of moisture.”

A persistant lack of snow cover is also threatening the winter wheat crop, with plantings left exposed to the elements.

The report provides further fodder to wheat bulls, with the “March Kansas City wheat contract traded above the 200-day moving average for the first time since August 2017,” according to the USDA.

The Kansas City HRW futures price was up fractionally Tuesday following the report’s release to build on Monday’s rally of more than 3%.

While trading volumes slumped following Monday’s rally, HRW futures for March were trading at $4.78/bu at the time of writing – a 16.4% increase from contract lows seen in mid-December.