Wheat... dribble down short steps-- week three

[sw363535]

Well my indicators said No, we are down on the overnite and waited for the open to see if it reversed and it did not.

We stay out unless you vote differently....    we wait for the harvest to give us direction.

And as we pointed out last week those indicators to watch on harvest are.

News of insurance claims,,, graze out or foraged acres,  acres harvested...

We will see many below average wheat acres get glyphosate to go to corn or milo.  Especially with weather delays in planting in the corn belt...

Which tells us the yields reports may be very good since the best and irrigated will be kept for harvest..... Acres already low and declining will be the bull news.  Yields will be the bear news as acres decline ..... no sense in arguing with it.  

And no one will report destroyed acres.  But crop insurance guys can give you an indicator.

 watch the basis and the protien bonus.... indicates how tight wheat supply really is.

As much as charts say this market is in an underpriced position and below profit range for several reasons this week may be without direction.... or continue to give back some more of the weather market.  

Patience as it goes down is good we are looking for an opportunity to own not sell.

[BF2012]

I just had my insurance adjuster out and I will be replanting all 700 acres of beans that I had planted.   Ground temps here still in the 40's despite sunshine during the day.  Corn looks like total crap, but there's a stand so it will be left....not a good start on the corn, don't know about recovery to anything close to normal.    I've heard some pretty reliable information that upwards of 50% of the corn crop in Illinois that has been planted will likely be replanted.  I'd say any beans in the ground or just emerged will likely be in the same boat.  Time will tell.    They are forcasting 2-3 for us in the next 7 days....so not even a chance of considering replanting....and the following week doesn't look much better.    We hit June 5 and remainder of corn acres will go to prevent plant or if it hasn't been sprayed or N on, will maybe be switched to beans.

All in all....I'd say this is a very Bearish report from where I sit.   Carry on.   Be safe.   Iowa will make up the difference.

[elcheapo]

Sound about right bf
Corn down 5 beans down 6 wheat down 9

2 to 3 inches here also

Neighbor called me to look at wheat....yes cold damage.
White heads
Imaginge if green heads wheat would be down 20.

[sw363535]

Trip to Denver results. Took a little time to survey wheat fields.
Direction. 83 hiway north sublette to Oakley then west close to i70.
Reason -- to get as many miles in snow belt as possible

Good to excellent fields. 15 ks. 2 colo.
Good but obvious freeze damage/ white heads and leaves, areas still flat, some water drowning. 21 ks & 3 colo fields.
Poor--areas emerged late in spring, pale disease or nitrogen issues & some white heads. 24 ks. & 1 colo

Bad no harvest. Sprayed, cattle on, thin & too weeds to harvest. 23. Ks. 3 colo
---------------

Loudest observation. Acres overall. Should have had 200-300 fields to observe in an average year.
Way more milo and corn stubble than wheat and wheat stubble. The basis is taking a toll.

[sw363535]

Return trip Colby to wakeeney south to minneola.

Primarily east of snow belt.
Not as much down wht. Less white heads, freeze damage not visible yet. 35% good looking so far. 30% poor stands, yellowed or diseases. 35%. Cattle on or glyphosate bath.
Too much volunteer in areas.
But same as west majority of acres will not be wheat

[sw363535]

This field is in the good category.  But when you step into it and look closer there are yellow flag leaves and twisted heads.

The report says wheat production will be nearly half normal and that is what I am seeing.

The disturbing part of the report is what they say, but the numbers do not say.   In the comment section they state that wheat usage for food goes down..... yet the report puts that into the crop harvested in 2018.......  carryout is to go down in 2018.....(seems like a sure bet).... also exports go down and IMPORTS increase.... all next year....... "stop producing here and buy it somewhere else, cheaper........"  seems like an ongoing theme since the 1990's   and planted acres drop even further......

But this is all NEXT years crop yet unplanted.  

Report for this years crop(2017)........ Has some reality adjusting to do..... It conflicts with previous projections on both planted acres and harvested acres...... Western half of ks will have a 30% reduction in harvested acres...... If not it will have a 30% reduction in yield.  take your pick..... 52.6 bushel average yield......... to accomplish that we will need to see harvested acres reduced by large numbers

Recent news reports have estimated the kansas wheat crop to be down 350 million bushels from 750 mb in 2016.  Yet usda continues to report that 2017 wheat production will increase nearly 250 mb over 2016..... kansas is the iowa of wheat...wonder where that 500mb is coming from?

I think I am safe in assuming wheat to be undervalued and volatile into the next 12 months.  And a decent buy. 

Keep an eye on the basis changes.... that may be our leading indicator as the percieved world supply becomes the bear anthem.