The weekly crop progress reports from the US start this week. Looking at the winter wheat rating for states such as Kansas and Oklahoma and Texas, the major HRW states, you start to get an idea of just how bad their crops must be. There is little chance the crop there can recover from the winter it has had but we are a long way from writing it off. April there is what September is to us, a soft April may allow what stand is there to reach it’s full potential. If April continues to be dry then expect yield estimates to be poor.
The million dollar question is just how likely is the US spring wheat farmer going to be to sow the 12.6 million acres the USDA pegged it at last week. Most analyst had predicted spring wheat area to be closer to 11.5 million acres. If the USDA have it wrong and we see a poor April in the HRW belt the supply of good protein wheat may well lay in the hands of the Canadians and Australians again.
The USDA report also noted a 13% reduction in US durum acres this year. The last couple of years haven’t been great for US durum farmers and they are showing their dismay with the market by switching acres from durum to milling wheat.
The legal US cannabis market is now almost the size of the US wheat market, $5.7Bn Vs $7.1Bn. Cannabis revenue has exceeded tobacco by billions of dollars. At US$1562 per pound you may well expect to see US production of Cannabis continue to increase. In Colorado an oversupply of cannabis has seen prices fall to US$1100 / pnd. Yield you ask, about 500lb per acre potentially.