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Moisture coming to Southern wheat growers after dry year

 

By MATTHEW D. ERNST

Missouri Correspondent

 

RIPLEY, Tenn. — Wheat growers in the Southern Corn Belt approaching the winter wheat planting season are facing the same challenges as corn and soybean producers: Lower global commodity prices and steady crop input costs.

But the fall weather is also a big factor as producers decide whether to drill wheat acres.

Low rainfall from late July through mid-September resulted in dry conditions from central Missouri east to the southern Ohio River Valley. In West Tennessee, a dry August and September accelerated corn harvest.

Some rain last week gave growers in northwestern Tennessee the chance to start tilling corn ground for wheat, said Chuck Danehower, University of Tennessee extension farm management specialist. "Producers would like to see more moisture before planting into the recommended window of October 15 to November 10," he noted.

Rains came early last week in western Kentucky, helping wheat farmers there feel better about planting. "We got 2 inches of rain, and that really helps," said Shane Bogle, agriculture extension agent in Caldwell County, squarely in the middle of Kentucky’s wheat production. "Most folks around here are planning to put out the same wheat acreage."

Besides weather, wheat acreage in Tennessee and Kentucky is most influenced by land tenure and crop rotation, as wheat is usually double-cropped with soybeans after corn. Danehower said some growers may opt away from wheat for next year, especially in share rental agreements.

"The economics for wheat and double-crop soybeans calculate to work best on own or cash rent ground," he said.

The September UT crop profitability projections for 2016 show wheat/soybean double-crop production competitive with corn, soybean and cotton returns over variable and land costs. But double-crop returns above fixed costs are not as competitive, because of more machine operations. "There is not a lot of excitement on planting wheat, but the same could be said of all the crops for 2016, as positive profit margins look to be a struggle for all crops at current price levels and projected expenses," said Danehower.

Markets were not favoring wheat through last Thursday. "The wheat market has plenty of negative fundamentals that are not encouraging for 2016 production," said Todd Davis, University of Kentucky agricultural economist at the Western Kentucky Research and Education Center, in Princeton.

"The market is signaling that full-season soybeans are better than wheat plus double-cropped soybeans," said Davis, who projects a loss of $40 per acre above variable costs for the double-crop system, compared to a $10 loss for full-season beans in western Kentucky, for 2016.

Global wheat markets showed some strength earlier last week but ended weaker. One factor: Statistics Canada last Friday raised its estimate for the Canadian wheat crop by 1.46 million metric tons, beating most analyst expectations.

Farmers could calculate more positive projections for 2016 wheat if markets show strength in the next few weeks. Randy Martinson, grain market analyst at Progressive Ag of Fargo, N.D., said last week’s USDA grain stocks report might help boost markets. "In all, you could look at this report as friendly to the wheat markets," he said.

The report out of Canada, combined with favorable wheat production in Europe, is likely to counteract the effect of any upward pressure from last week’s USDA wheat stocks report.

Stocks were reported at 2.09 billion bushels, fewer than trade expectations of 2.15 billion, according to Martinson. The USDA decreased U.S. harvested acreage for both spring and winter wheat.

That could also be favorable for wheat markets.

Dry global winter wheat planting conditions, if they continue, could also influence wheat markets up. That includes dry conditions in Russia and Australia.

But wheat producers in the Southern Corn Belt and Mid-South region probably won’t be facing the lack of moisture for planting. Heavy rains last week likely halted corn harvest and wheat drilling in much of Kentucky, according to Davis. "I drove through heavy rains from Bowling Green to Lexington last Tuesday (Sept. 28)," he reported.

10/7/2015