Drought in HRW area intensifies to most severe rating: USDA

9 Mar 2018 | Tom Houghton

Drought across HRW growing regions in the US intensified in the week to March 6 as precipitation remained below average, according to the USDA’s weekly drought monitor released Thursday, leaving lingering questions over the viability of the coming crop.

The Southern Plains are suffering the effects of one of the worst winter droughts in living memory with the North Oklahoma/Southern Kansas border region upgraded to a “D4” or “Exceptional” rating this week – the most severe intensity on the scale.

 “Unirrigated winter wheat in the Texas Panhandle and adjoining areas is almost a total loss,” the USDA wrote.

Nationwide, 39% of winter wheat production is within an area experiencing drought, while the bulk of the US’ major HRW growing region is suffering even more.

“Continued dryness with periods of strong winds and low humidity led to broad deterioration from the Texas Panhandle and northeastern New Mexico northeastward into the central Plains,” it wrote.

“This resulted in broad D3 expansion across western sections of the Texas and Oklahoma Panhandles... These areas received less than 10 percent of normal precipitation during the last 90 days and generally under half of normal precipitation since late autumn.”

The market has responded to the deteriorating conditions since the start of the year, with prices for new crop wheat on the Kansas City HRW contract rallying almost 30% from a December low to top out at $5.65/bu at the beginning of March.

Prices have come off about 5% since then on the back of a bearish USDA supply and demand report and some relief in the form of rains in eastern Oklahoma.

Nonetheless, the prospect for HRW remains precarious, with the general forecast for most growing areas in the Southern Plains showing rain well-below average until the end of next week at the earliest.