Kub's Den 06/16 05:00
Spring Wheat: Sticking Your Head Out Too Early Doesn't Pay
Already in mid-June, spring wheat in the Northern Plains is heading out --
far ahead of its typical crop progress pace, which has bleak ramifications for
"The early bird gets the worm."
"Wake up an hour early to live an hour more."
"Early to bed and early to rise makes a man healthy, wealthy and wise."
I myself am an early bird, but I realize the smug sayings above are probably
pretty annoying to all the people who are natural night owls and struggle to
wake up in the mornings. Not everyone's peak productive hours hit when the
eastern sky is still pink, so the sayings aren't universally true.
They're especially untrue for crops, in some cases. We generally think that
early crop progress is a good thing -- early planted corn that tassels before a
summer heatwave hits or early planted soybeans that canopy before the waterhemp
germinates -- but some numbers popped out in the latest USDA Crop Progress
report to remind us how "early" progress can sometimes be a huge warning sign
of problems to come.
Lots of crops in lots of places seem to be running ahead of pace this
summer: Michigan's corn emergence is 20 percentage points ahead of its
five-year average, and Illinois soybean emergence is 16 points ahead of pace;
even Colorado's sunflower planting progress is 15 points ahead of its average
But the most alarming numbers come from the spring wheat tables, where South
Dakota's proportion of spring wheat already heading out by June 13 was 45%, or
19 percentage points ahead of average. Already 19% of Minnesota's spring wheat
is heading out, or 13 percentage points ahead of average. In North Dakota,
which is by far the nation's largest source of spring wheat with almost half of
total production in any given year, windshield tours and grower reports (and
Twitter) all confirm that there, too, the crop is maturing weirdly fast, with a
noticeably large portion already heading out at least two weeks earlier than
usual. In a few limited cases, the scenario for spring wheat and other small
grains in North Dakota is already so grim that producers are cutting the crops
and just putting them up for hay.
Condition ratings are bad, too -- only 37% of the nation's spring wheat
fields are rated "good" or "excellent," and 27% are called "poor" or "very
poor." But it is the fast progress that really caught my eye. There can be such
a thing as too-fast progress, if you want a shot at good yields.
Greg Endres, a cropping systems specialist at North Dakota State
University's Carrington Research Extension Center, pointed out to me that for
spring wheat in 2021, "Fast development isn't that surprising given the fast
planting and the fast accumulation of heat units in recent weeks, but we really
don't want that for cool-season crops. If the plant takes more time for
development, that means more chances for higher grain yields." Once the head is
out of a wheat stem, the biology of the plant has effectively already decided
how many seeds to set.
There's no statistically clear conclusion for the market to draw about how
these early spring wheat progress figures will ultimately influence nationwide
yields. It's a difficult relationship to study because nationwide spring wheat
production is spread across regions with pretty diverse weather patterns (the
Washington/Idaho/Montana region, with 35% of U.S. production, is separated by a
mountain range from the North Dakota/South Dakota/Minnesota region with 65% of
U.S. production). This year, of course, both regions are getting hit with
severe long-term drought, although at least the Mountain West isn't being
blasted with the current heatwave (and rapid accumulation of growing degree
Even on a state-by-state basis, the years when spring wheat starts heading
out super-fast aren't necessarily associated with lower-than-trendline yields
at harvest. For instance, 2012 was notable, with 71% of Minnesota's spring
wheat already headed out in mid-June. Nationwide, 33% of spring wheat fields
were already heading out in mid-June of 2012, but average yields turned out
fairly normal at 45 bushels per acre. Bear in mind that spring wheat harvest is
typically three-quarters done by the end of August, when the 2012 drought was
Still, seeing this much spring wheat heading out already in mid-June during
this particularly dry year is a bad sign for ultimate 2021 yield prospects.
"Rapid growth itself isn't bad," Endres said, "if you had good soil moisture to
support the crop going forward at this critical stage." The weather forecast,
however, currently projects high temperatures that are stressful to dry wheat
plants, and it doesn't currently project much precipitation for spring wheat
regions in the next few critical days, with some exceptions in southern
Minnesota and northern Idaho.
Note that the same phenomenon is also happening for winter wheat in Nebraska
(93% headed versus 88% average), South Dakota (89% versus 76%) and Washington
(93% versus 87%) -- areas that all have some degree of drought, abnormally dry
conditions or high temperatures in the immediate forecast.
The day-to-day price movements of wheat futures this week, like those of all
the other grains, may be more influenced by traders' outlooks for inflation and
Federal Reserve interest rate responses instead of the weather forecasts in the
Northern Plains and Canadian prairies. Markets tend to catch up with reality
eventually, however. For those looking forward a couple of months toward spring
wheat harvest figures, it may be worth remembering that earlier isn't always
Elaine Kub is the author of "Mastering the Grain Markets: How Profits Are
Really Made" and can be reached at firstname.lastname@example.org.
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