Released: July 10, 1998
Volume 98, No. 7

Kansas growers planted 19.75 million acres to the four major crops (wheat, sorghum, corn, and soybeans), down 3.1 percent from 1997. Wheat seeded last fall totaled 10.7 million acres, unchanged from the previous forecast and down 6 percent (700,000 acres) from last year.

Planted acreage for soybeans, at 2.55 million acres, is 4 percent above a year ago and the largest planted acreage of soybeans in Kansas history. Expected acreage for harvest, at 2.5 million acres, is 4 percent above last year and the largest harvested acreage for soybeans in Kansas history. Corn planted acreage, at 3.0 million acres, is 5 percent above a year ago and the largest corn acreage planted since 1946. Acreage expected to be harvested for grain is 2.85 million acres, up 6 percent from last year. Sorghum acreage to be planted, at 3.5 million acres, is down 4 percent from last year. Kansas still ranks first in the nation in sorghum acreage. The acreage intended for harvest as grain , at 3.3 million acres, is also down 6 percent from last year. Oats planted in 1998, at 110,000 acres, is 15 percent below last year. Oats expected to be harvested for grain, at 70,000 acres, is down 10,000 acres from last year. Production is forecast at 4.1 million bushels. Barley planted acreage, at 100,000 acres, is unchanged from last year. Expected acreage for harvest, at 9,000 acres, is up 1,000 acres from last year. Production is forecast at 405,000 bushels. Rye acreage planted, at 80,000, is up 30,000 acres from last year. Acreage for harvest, at 15,000 acres, is up 5,000 acres from a year ago. Sunflowers planted are expected to total 200,000 acres, down 9 percent from a year ago. Of the total sunflower acres, 180,000 are planted to oil type varieties and 20,000 to non-oil varieties. Acreage for harvest, at 195,000, is down 8 percent from last year. Hay acreage to be harvested is expected to total 2.85 million acres, up 6 percent from last year. Of the total hay acreage, 950,000 acres are planted to alfalfa. Acreage of dry beans planted, at 20,000 acres, is down 9 percent from last year. Harvested acreage is forecast at 19,000 acres. Cotton acreage is expected at 15,000 acres in 1998, up 25 percent from the 12,000 planted last year.

Table 1-- KANSAS WHEAT PRODUCTION, JULY 1, 1998
District	Acres Planted		Acres Harvested			Yield Per Acre		Production
	1997	1998	1997	1998	% of Prev. Yr	199 7	1998	1997	1998	% of Prev. Yr
WINTER WHEAT	- - - - - - - - 1,000 Acres - - - - - - - -				Percent	Bushels		1,000 Bushels		Percent
Northwest	1,185	1,200	1,144	1,140	100	37	46	42,861	52,400	122
West Central	1,310	1,270	1,254	1,149	92	43	49	53,445	56,300	105
Southwest	1,930	1,650	1,843	1,553	84	37	51	68,318	79,000	116
North Central	1,455	1,490	1,420	1,430	101	51	52	71,779	74,000	103
Central	1,705	1,560	1,667	1,450	87	54	48	89,883	69,000	77
South Central	2,585	2,340	2,475	2,220	90	48	48	118,240	107,000	90
Northeast	290	260	279	250	90	51	47	14,158	12,000	85
East Central	310	290	303	285	94	51	48	15,497	14,000	90
Southeast	630	640	615	623	101	52	50	31,819	31,200	98
State	11,400	10,700	11,000	10,100	92	46	49	506,000	494,900	97

Table 2-- CROP PRODUCTION, JULY 1, 1997-1998
Crop	Planted	Harvested		Yield Per Acre		Production
	1998	1997	1998	1997	1998	1997	1998
	- - - - 1,000 Acres - - - -			Bushels		1,000 Bushels
KANSAS
Winter Wheat	10,700	11,000	10,100	46	49	506,000	494,900
Barley	10	8	9	40	45	320	405
Oats	110	80	70	64	58	5,120	4,060
Peaches 1/	--	--	--	--	--	200	500
UNITED STATES
All Wheat	65,799	63,577	59,211	39 .7	42 .6	2,526,552	2,522,444
Winter Wheat	46,850	41,813	40,757	45 .0	46 .6	1,882,609	1,898,719
Barley	6,446	6,425	6,078	58 .3	61 .9	374,478	375,962
Oats	4,992	2,911	2,936	60 .5	62 .4	176,104	183,201
Peaches 1/	--	--	--	--	--	2,651,100	2,432,000

1/ Unit in pounds.

Winter wheat production is forecast at 1.90 billion bushels. This is up 9 percent from June 1, and 1 percent higher than 1997. The U.S. yield is forecast at a record high 46.6 bushels per acre. This is up 3.7 bushels per acre from June 1. Grain area was not changed from last month. Hard Red Winter Wheat production is up 15 percent from June due to dramatically higher yields, particularly in the Great Plains. Yields in Kansas, Oklahoma, and Texas are at record levels. Collectively, the Objective Yield data for Hard Red Winter Wheat are forecasting record average head weights, coupled with well above average head counts. Soft Red Winter, at 451 million bushels, is down from a month ago. White Winter production is up from last month, due to improved yield prospects in Oregon and Washington.

Table 3-- CORN, SORGHUM, AND SOYBEANS, KANSAS, BY DISTRICTS, 1997-1998
District	Corn Planted			Sorghum Planted			Soybeans Planted
	1997	1998	% of Prev. Yr	1997	1998	% of Prev. Yr	1997	1998	% of Prev. Yr
	1,000 Acres		%	1,000 Acres		%	1,000 Acres		%
Northwest	458	525	115	185	200	108	21	28	133
West Central	206	214	104	250	470	188	8	13	163
Southwest	810	900	111	520	494	95	35	43	123
North Central	212	216	102	665	525	79	210	231	110
Central	105	105	100	590	570	97	95	110	116
South Central	328	338	103	580	519	89	195	220	113
Northeast	382	372	97	305	239	78	592	600	101
East Central	233	212	91	225	213	95	655	660	101
Southeast	116	118	102	330	270	82	639	645	101
State	2,850	3,000	105	3,650	3,500	96	2,450	2,550	104

alfalfa and alfalfa mixtures cut for hay is estimated at 23.4 million acres, down 1 percent from 1997, while all other hay acreage is estimated at 36.4 million acres, 2 percent below last year. Sunflower planted area is estimated at 3.42 million acres, up 16 percent from last year. Harvested area is estimated at 3.31 million acres, also up 16 percent. Oil type varieties comprised 2.84 million acres this year, 21 percent above 1997. Non-oil type varieties were planted on 582,000 acres, down 3 percent from the previous year. Dry bean planted acreage is estimated at 2.05 million acres this year, up 11 percent from both last year and two years ago.

Table 4-- CROP ACREAGE, 1997-1998
Crop	Kansas				United States
	Planted		Harvested		Planted		Harvested
	1997	1998	1997	1998	1997	1998	1997	1998
	- - - - - - - - - - - - - - - - - - 1,000 Acres - - - - - - - - - - - - - - - - - -
Corn 1/	2,850	3,000	2,700	2,850	80,227	80,798	73,720	74,284
Sorghum 1/	3,650	3,500	3,500	3,300	10,108	8,926	9,391	8,118
Soybeans	2,450	2,550	2,400	2,500	70,850	72,720	69,884	71,698
Oats	130	110	80	70	5,169	4,992	2,911	2,936
Barley	10	10	8	9	6,910	6,446	6,425	6,078
Rye	50	80	10	15	1,433	1,586	341	428
Dry Edible Beans	22 .0	20 .0	20 .0	19 .0	1,851 .8	2,047 .2	1,720 .2	1,943 .7
Sunflowers	220	200	213	195	2,949	3,420	2,852	3,307
All Hay	-	-	2,700	2,850	-	-	60,815	59,819
Alfalfa	-	-	900	950	-	-	23,673	23,437
Other Hay	-	-	1,800	1,900	-	-	37,142	36,382
Cotton	12 .0	15 .0	10 .0	2/	13,808 .0	12,933 .5	13,270 .0	2/

1/ Harvested area is for grain. 2/ No estimate currently available.

Kansas wheat stocks in all positions totaled 106.9 million bushels on June 1, significantly above last June. Wheat stored at off-farm locations (mills, elevators, warehouses, and processors) totaled 96.9 million bushels, which accounted for 91 percent of the total grain stocks. Wheat stocks in both on-farm and off-farm positions were the highest since June 1991.

Sorghum grain in all positions totaled 48.2 million bushels, 3 percent below last year's level. Off-farm stocks accounted for 37.2 million bushels and on-farm stocks 11.0 million bushels.

Kansas corn stocks in all locations, at 88.2 million bushels, were 20 percent higher than last June. Off- farm stocks were 58.2 million bushels, which accounted for 66 percent of the total corn stocks. On-farm stocks at 30.0 million bushels, were down 1.0 million bushels from last June.

Off-farm oat stocks were 1.14 million bushels.

Kansas soybeans in all locations totaled 21.0 million bushels, a 37 percent increase from June 1997. Off-farm stocks, at 13.5 million bushels, were up 14 percent from last year and accounted for 64 percent of the total soybean stocks. On-farm stocks totaled 7.5 million bushels, compared with 3.5 million last year.

Table 5-- STOCKS OF GRAIN - JUNE 1, 1998, WITH COMPARISONS
Grain	Position	Kansas			United States
		June 1, 1997	March 1, 1998	June 1, 1998	June 1, 1997	March 1, 1998	June 1, 1998
		1,000 Bushels
All Wheat	On-Farms	2,500	25,000	10,000	154,560	399,920	224,210
	Off-Farms 1/	31,333	188,301	96,901	289,047	766,644	499,122
	TOTAL	33,833	213,301	106,901	443,607	1,166,564	723,332
Sorghum Grain	On-Farms	17,000	28,000	11,000	38,815	56,760	27,200
	Off-Farms 1/	32,840	92,560	37,186	80,329	177,916	68,907
	TOTAL	49,840	120,560	48,186	119,144	234,676	96,107
Corn	On-Farms	31,000	48,000	30,000	1,501,000	2,975,000	1,830,000
	Off-Farms 1/	42,550	123,934	58,162	995,550	1,964,898	1,209,122
	TOTAL	73,550	171,934	88,162	2,496,550	4,939,898	3,039,122
Oats	On-Farms	800	*	*	33,100	58,800	34,500
	Off-Farms 1/	838	1,324	1,140	33,576	52,653	39,503
	TOTAL	1,635	*	*	66,676	111,453	74,003
Barley	On-Farms	*	*	*	43,715	81,300	44,700
	Off-Farms 1/	50	47	34	65,735	98,299	75,535
	TOTAL	*	*	*	109,450	179,599	120,235
Soybeans	On-Farms	3,500	14,000	7,500	216,000	637,000	318,000
	Off-Farms 1/	11,840	35,364	13,452	283,890	565,922	274,853
	TOTAL	15,340	49,364	20,952	499,890	1,202,922	592,853
1/ Includes stocks at mills, elevators, warehouses, terminals, & processors. * Data not published to avoid disclosure of individual operations.

Nearly every figure in the USDA's July wheat crop estimate was a surprise to the markets. The winter wheat crop was much larger than expectations while the spring crop was smaller. Only the durum crop was close to the trade's pre-release estimate. At 1,889 million bushels, the winter wheat figure was 119 million bushels above the average of the trade's pre- release guesstimate and 9 percent above the June figure. Since 1950, the largest increase between the July and the June reports was 11 percent (set last year). However, this year's 9 percent increase is the second largest in nearly 50 years and is matched only by one other 9 percent increase (which occurred in 1979). On average, there is only a 2 percent increase in winter wheat production between the July and the June reports.

Hard Red Winter (HRW) production, pegged by USDA at 1,180 million bushels, was up 15 percent from the June estimate and 118 million bushels (11 percent) larger than the trade's average forecast. This is the third year in a row that the size of the HRW crop has surprised the market. In 1996 the July HRW crop estimate was 3 percent larger than trade estimates, and last year, the July HRW report was 6 percent larger than expectations. The USDA's history of by-class winter wheat estimates (starting as of the May estimate) goes back to 1978. This year's July/June HRW increase was tied with last year as the largest on record. The unexpected increase in winter wheat production was due solely to the jump in the HRW crop. Soft Red Winter (SRW) production was posted at 451 million bushels, down 1 percent from the June estimate and only 4 million bushels less than expectations. Soft White Winter (SWW) production estimated at 268 million bushels, up 2 percent from the June estimate and in-line with industry expectations.

The "flip side" of the report was the low figure projected for spring wheat. Spring wheat production was estimated at 498 million bushels, down 11 percent from last year's crop and 27 million bushels below the average of the trade's average estimate. Durum production was pegged at 126 million bushels, up 47 percent from last year's crop but very close to the trade's average estimate. In aggregate, total wheat production was put at 2,522 million bushels, only 5 million bushels less than last year's crop and up 5 percent form the USDA's June projection.

Since the crop survey was conducted (the first week of July), winter wheat crop conditions for have held steady or improved slightly. Two-thirds of the time the final winter wheat production figure falls within 1 percent of the June report. Consequently, it seems likely that the final report could be larger than the July figure but probably not by more than 10 or 20 million bushels. Spring wheat crop conditions have also improved somewhat since early July and a model of spring wheat yields (based on the USDA's weekly crop condition reports) pegs the spring wheat yield at 36 bushels, about 2.5 bushels larger than the USDA's spring yield estimate.

Export activity is the lowest on record for this date. As a consequence, the USDA lowered its projection for exports by 50 million bushels. However, the USDA increased their estimate of wheat feeding by 100 million bushels. Some increase in wheat feeding had been expected due to the abundant supplies of HRW and the likelihood that the drought in the Southern Plains will reduce feed grain supplies. The USDA raised its estimate of ending stocks by only 40 million bushels, but they lowered their price forecast by $.20. The mid-point of the range of the USDA's forecast for wheat now stands at $2.90, $.50 lower than last year's price.

Seasonally, wheat prices tend to bottom in July. However, the prospect for a slightly larger spring wheat crop (and possibly a better than expected Canadian crop) combined with a lackluster outlook in export demand, makes a strong fundamental case for a further decline in market prices.

Return to the KASS Homepage