Drought to shrink Kansas wheat crop to smallest since 1989: tour

MANHATTAN, Kan. (Reuters) - Drought sapped yield potential for the Kansas wheat crop and likely will result in the smallest harvest in the top wheat growing state since 1989, scouts said on the final day of a annual crop tour on Thursday.

Wheat fields show drought affects near Colby, Kansas, U.S., May 1, 2018. REUTERS/Michael Hirtzer

The crop shortfall could mean higher prices for wheat that would make U.S. supplies less competitive in global markets. Russia already has overtaken the United States as the top global wheat exporter.

K.C. July wheat futures surged 2 percent after the crop tour results came out, ending up 12-1/2 cents at $5.67-3/4 per bushel, highest in 10 months.

The Wheat Quality Council estimated average yields for hard red winter wheat at 37.0 bushels per acre (bpa), below the five-year crop tour average of 40.98 bpa and the U.S. Agriculture Department’s 2017 actual Kansas yield of 48.0 bpa, reflecting stressful dry conditions in recent months.

The scouts’ average estimate of 2018 Kansas wheat production was 243.3 million bushels, down sharply from USDA’s actual production last year of 333.6 million and the smallest since 213.6 million in 1989.

“The story of this crop is that it’s late and dry,” said Dave Green, the leader of the crop tour and executive vice president of the Wheat Quality Council.

“The crop has more of a chance for lower production than higher,” Green said of the production estimate.

He added that cold temperatures, which damaged some wheat plants as early as a few weeks ago, hampered crop development through the spring season when plants break winter dormancy. Many wheat fields will go through the critical grain-filling period under hot conditions during the next two months.

The tour started on Monday in Manhattan, swinging west to the town of Colby on Tuesday and then south to Wichita on Wednesday, before ending back in Manhattan. Tour scouts made a total of 644 field stops.

Rains moved through central Kansas on Wednesday, giving plants a needed dose of moisture. If more rains come and temperatures do not get too hot, yield prospects could improve significantly.

A grain buyer at a flour mill who was a scout on the tour said the tour estimate was slightly low. “The rains in the central corridor, those are going to help more than a lot of people think,” he said.

Reporting by Michael Hirter in Manhattan, Kansas; writing by Julie Ingwersen in Chicago; Editing by Chizu Nomiyama and Bill Trott