I just dropped in to see what condition my condition was in
The Snapshot
- The USDA release a regular crop condition report.
- This reports the percentage of the crop from Excellent to very poor.
- The first condition report for the 2020/21 crop was released recently.
- The crop rated good/excellent is at the lowest level (41%) since 2013 for week 43.
- The crop rated poor/very poor is at the highest level (19%) since records commenced for week 43.
- The crop condition is not starting well, but it is still too early to write off the US crop. There is still a long way until harvest.
The Detail
Whilst many people bag the USDA, they do release a phenomenal amount of data which is a godsend for analysts. Two important datasets are the crop condition and planting pace.
Conditions
The crop conditions report provides, funnily enough, data on the condition of the crop at a state and national level. The data is laid out in five categories, and the percentage of the crop which is in each category. These categories are:
- Excellent
- Good
- Fair
- Poor
- Very poor
The USDA released the first crop condition report for the 2020/21 winter crop last week. The main focus is generally on the percentage crop in the good/excellent category.
At present, the crop is at 41% good/excellent, the lowest level since 2013 for week 43. This is not surprising considering the dry conditions which persisted through the wheat belt during seeding.
At the other end of the extreme, the percentage of poor/very poor wheat is at 19%. This is the highest level for week 43 since the USDA started reporting conditions.
Is it too early?
In my view, it is too early to write off the US wheat crop based on the first condition report. Wheat is an extremely hardy crop and can turn around very quickly.
It will start to get more severe if we see further downgrades in the coming months. The US wheat crop is however not beginning the season with a great outlook.