According to a report by the US Department of Agriculture, producers are expected to harvest only about 67% of their planted acres, which would be the lowest harvest ratio since 1917. The report cited years of dry conditions on the US Plains as the cause of this situation.
The lack of moisture has affected wheat plants so severely that some won't produce "heads of grain," making it pointless to harvest them. Farmers have the option of filing crop-insurance claims for failed acres or planting something else instead. Analysts will soon be able to survey fields and make production estimates during an annual tour in the top wheat-growing state of Kansas.
Next week's crop tour is anticipated to reveal a mixed picture of wheat fields, with some showing short wheat, thin stands, and some that look really good. However, a lot of fields won't be harvested at all. Justin Gilpin, chief executive officer of the trade group Kansas Wheat, commented on the upcoming crop tour, saying that analysts would witness the fields' variable condition.
The USDA has predicted that the high rate of abandonment will decrease US wheat supplies to lower levels than what analysts were expecting. This could keep domestic prices elevated, even with rival producers such as Canada and Argentina likely to boost output.
After the report's release, the futures of hard red winter wheat, the variety grown in drought-stricken states including Kansas and Oklahoma, saw an upsurge of as much as 6.9%. This is the most significant intraday gain for the most-active contract since October.