Wheat

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Morguefile

The outlook for winter-wheat yields in Kansas, the top U.S. producer, is diminishing as warm, dry and windy conditions deplete soil moisture and threaten to shrink harvests for a second straight year.

Moderate-to-extreme drought ratings in the state rose to 69 percent as of April 7, from 37 percent at the start of the year, the U.S. Drought Monitor reported. Kansas wheat in good or excellent condition has dropped by almost half from late October, approaching levels of a year ago, when lack of rain led to the smallest crop since 1989.

The deterioration comes after ample rains and timely planting in September and October buoyed prospects for a rebound from last year's harvest. Plants in some areas will start to wither without showers in the next two weeks, said Karen Hill, the general manager for Elkhart Co-op Equity Exchange in Elkhart, Kansas.

"The crop was looking pretty good until three weeks ago; now it's starting to look a little yellow," said Hill, who manages 14 grain facilities in Kansas, Oklahoma and Colorado. "The crop is better than last year because we had moisture at planting, but now we are getting close to permanent damage."

The U.S. Department of Agriculture estimated on March 31 that Kansas farmers would sow 9.4 million acres of wheat in 2015, down 2.1 percent from a year earlier. Growers harvested a 25-year-low 246 million bushels last year as yields tumbled.

Hard, red winter-wheat futures on the Chicago Board of Trade have gained about 6 percent since the beginning of March, after dropping 14 percent in the first two months of the year.

Prices have slid 25 percent in the past year as global production rose to a record for the second straight year, reducing overseas demand for U.S. supplies.

Some fields were permanently damaged by freezing temperatures this month, and bugs are beginning to feed on the crop, according to Ben Bandvik, the grain division manager for Goodland, Kansas-based Frontier Ag Inc. a cooperative with 30 terminals in the northwest part of the state.

"The crop started exceptionally well and has time to recover," Bandvik said. "Right now the wheat looks rough, and the next few weeks will determine if we have an average crop or below average."

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