Hard red winter wheat basis bids were steady on Tuesday as farmers, millers and merchants alike kept a close eye on development of the drought-stricken new wheat crop.
With the crop headed into late stages of development there was little opportunity for a rebound from the winter drought that plagued the US Plains, wheat experts said on Monday.
Those sentiments were underscored by an updated crop condition report Monday afternoon that said in top producer Kansas the new crop was rated 31 percent poor to very poor, 39 percent fair, and only 30 percent good to excellent.
The situation was more bleak in Oklahoma, where the crop was rated 72 percent poor to very poor, and in Texas, where the new wheat crop was rated 77 percent poor to very poor.
Along with the dry conditions, high heat has been accelerating development, resulting in headed wheat stands that are short and thin. In Kansas, 20 percent of the crop was headed, compared with the five-year average of 2 percent.
The worries about the new crop have been driving sporadic pricing rallies and setbacks, and on Monday Kansas City Board of Trade HRW wheat futures closed steady to 2 cents lower, with the May contract unchanged at $4.37-1/2 and the July down 1-1/4 cents at $4.43.
The market was expected to open 1-2 cents lower on Tuesday.
In world wheat news, Statistics Canada projected Canada's all-wheat acreage at 25.6 million acres, up 2.7 percent from 2005 but below the average analyst estimate of 25.8 million. StatsCan put spring wheat acreage at 19.8 million acres, up nearly 11 percent.
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