Released: May 10, 2001
Volume 01, No. 5

Seeding of the 2001 wheat crop began in early September. However, progress was slow as some producers were waiting for rain before planting. By the middle of September, only 4 percent of the crop was seeded and top soil moisture supplies for nearly three-quarters of the State were rated very short. Scattered rains were received the last half of September through early October. Dry weather returned by mid-October and seeding had progressed to 69 percent complete with 24 percent of the crop emerged. In late October, rain fell across the State with some areas reporting heavy rains. On
November 5, 92 percent of the acreage was seeded and 81 percent of the crop had emerged. Fifty-one percent of the wheat crop was rated in good to excellent condition. Seeding continued during November and by the 26th, 98 percent of the acreage was seeded, 92 percent of the crop had emerged, and 55 percent of the crop was rated in the good to excellent condition. Except for a cold spell the latter part of December, temperatures were normal throughout the winter. Most of the State received rain or snow during March. The condition of the crop had decreased to 33 percent good to excellent on April 1. Scattered showers during April brought precipitation to most of the State. Only 2 percent of the crop was jointing by April 1, well behind last year and normal. Wheat jointing continued to progress behind last year and normal, as only 67 percent was jointing by April 29. Condition of the crop had declined slightly to 28 percent good to excellent.

Table 1-- KANSAS WHEAT PRODUCTION, MAY 1, 2001
District	Acres Planted		Acres Harvested			Yield Per Acre		Production
	2000	2001	2000	2001	% of Prev. Yr	2000	2001	2000	2001	% of Prev. Yr
WINTER WHEAT	- - - - - - - - 1,000 Acres - - - - - - - -				Percent	Bushels		1,000 Bushels		Percent
Northwest	1,090	1,000	1,055	830	79	32	32	34,110	26,800	79
West Central	1,200	1,130	1,160	730	63	33	28	38,420	20,700	54
Southwest	1,530	1,540	1,450	1,255	87	36	31	52,430	39,500	75
North Central	1,290	1,380	1,225	1,175	96	39	35	47,345	41,400	87
Central	1,560	1,630	1,510	1,505	100	40	37	60,480	56,000	93
South Central	2,210	2,250	2,120	1,990	94	37	33	79,000	65,600	83
Northeast	200	230	187	210	112	44	37	8,265	7,700	93
East Central	210	240	198	225	114	40	42	8,000	9,500	119
Southeast	510	500	495	480	97	40	38	19,750	18,400	93
State	9,800	9,900	9,400	8,400	89	37	34	347,800	285,600	82

Winter wheat production is forecast at 1.34 billion bushels, down 14 percent from 2000 (see table 2) to the lowest level since 1978. All classes of winter wheat are down from the previous year. Based on May 1 conditions, the U.S. yield is forecast

at 41.8 bushels per acre, 2.8 bushels less than last year. Grain area totals 32.1 million acres, down 8 percent from last season. This will be the smallest winter wheat acres since 1957.

Table 2-- WINTER WHEAT, KANSAS AND SELECTED STATES 1/, MAY 1, 2001
State	Acreage			Yield Per Acre		Production
	Harvested 2000	For Harvest 2001	% of Prev. Yr.	2000	2001	2000	2001	% of Prev. Yr.
	1,000 Acres		Percent	Bushels		1,000 Bushels		Percent
KANSAS	9,400	8,400	89	37.0	34.0	347,800	285,600	82
Washington	1,800	1,750	97	73.0	63.0	131,400	110,250	84
Oklahoma	4,200	3,600	86	34.0	27.0	142,800	97,200	68
Texas	2,200	2,900	132	30.0	30.0	66,000	87,000	132
Colorado	2,350	2,050	87	29.0	34.0	68,150	69,700	102
Ohio	1,110	990	89	72.0	70.0	79,920	69,300	87
Nebraska	1,650	1,700	103	36.0	36.0	59,400	61,200	103
Idaho	730	710	97	90.0	80.0	65,700	56,800	86
Arkansas	1,100	1,040	95	54.0	53.0	59,400	55,120	93
Illinois	920	770	84	57.0	54.0	52,440	41,580	79
United States	35,022	32,088	92	44.6	41.8	1,562,733	1,341,381	86

1/ Selected states based on top 10 states according to production of winter wheat.

PASTURE CONDITION

Kansas pasture condition as of May 6 was 4 percent excellent, 39 percent good, 36 percent fair, 16 percent poor, and 5 percent very poor. Over the State, topsoil moisture was rated 10 percent surplus, 74 percent adequate, 15 percent short, and 1 percent very short.

HAY STOCKS

Hay production during 2000 totaled 6.54 million tons, down 13 percent from last year. As of May 1, Kansas hay stocks totaled 500,000 tons, down from 1,400,000 tons last year and the 1,525,000 tons two years ago .

COTTON

Kansas farmers expect to plant 44,000 acres of cotton in 2001, up 4,000 acres from last year. This is an increase of 10 percent in planted acres from the previous year.

This week, a weighted index of winter wheat crop conditions had a value of 326 (300 = Fair and 400 = Good). That's 42 points below last year and 25 points less than the fifteen year average for this time of year. Based on current crop conditions, all winter wheat yields are projected to be 41.2 bushels, that's 3.4 bushels less than last year's yield and it's six-tenths of a bushel less than the USDA's May yield of 44.6 bushels. Assuming harvested acres remain unchanged at 32.09 million acres, the model suggests that June winter wheat production estimate could be 1,322 million bushels (20 million bushels smaller than the May estimate).

Similarly, a model of HRW yields (also based on current HRW crop conditions) is projecting a HRW yield of 32.7 bushels. That's 3.1 bushels less than last year's yield and it's 1.5 bushels less than the USDA's May "implied" HRW yield of 33.1 bushels. Assuming HRW "implied" harvested acres remain unchanged at 21.0 million acres, the model suggests that the June estimate for HRW wheat production could be 686 million bushels (32 million bushels smaller than the May estimate).

The USDA's World Board (an in-house group of economists who provide supply:demand projections) lowered their U.S. total wheat production to 1,961 million bushels, down 164 million bushels from the projections presented the Ag Outlook Forum (in late February), and down 12 percent from last year. If correct, this would be the smallest wheat crop since 1974.

The World Board also made changes in the other components of their supply:demand projection -- they raised food use by 5 million bushels but lowered feed use by 25 million bushels. The midpoint of the range of the USDA's forecast for annual average prices rose to $3.05. That's up from their February forecast of $2.85/bushel and $.42 higher than the 2000/01 price.

Given the slow pace of export sales, it is not surprising that the USDA lowered their projection for wheat exports to 1,000 million bushels (down 25 million bushels from the February projection). As of the beginning of May (May 3), export commitments were only 19 million bushels (see Figure 1). That's down some 6 million bushels from last year. This is the lowest figure for this date in the 28 years that the USDA has been reporting this data. On average, about 8 percent of total annual wheat grain exports are booked as of early May (and 20 percent by early June), which would mean that nearly 75 million bushels should have been contracted by this date.

The figure for may export sales includes an estimated 6 million bushels of Food Aid that has been tendered for by the CCC but that won't be shipped until the new marketing year begins on June 1. Some industry analysts expect that less food aid wheat will be shipped in 2001/02. It is estimated that 118 million bushels was shipped in 1998/99, 142 million bushels in 1999/00, and that 115 million bushels will have been shipped in 2000/01.

The USDA's estimate of world wheat production was 572.4 million metric tons (MMT). That's down 8 MMT from last year. As a consequence, the USDA reduced their estimate of world ending stocks. Ending stocks are now projected to be just 23.6 percent, down from last year's 26.9 percent and possibly the lowest ratio in over forty years. The USDA is also projecting that world imports will be 125.9 MMT, up slightly from last year's 124.2 MMT

Seasonally, harvest pressure could eventually push KCBT July futures lower. In the last two weeks, however, July futures have demonstrated considerable resistance to downside pressure. If winter wheat and spring wheat crop prospects continue to worsen, prices could move higher. However, should relatively "normal" conditions prevail, and considering the low level of export demand, wheat futures (and cash prices) could move lower and challenge the previous life-of-contract lows. Wheat producers may want to take advantage of current price strength and make some additional sales. However, if producers price a majority of their expected production, they may want to consider using options -- in order to leave open the opportunity to capture higher prices should wheat fundamentals continue to improve.

Return to the KASS Homepage