Bone-dry US Northern plains means crops from barley to oats are parched

Chicago

WHEAT'S not the only crop getting parched as a worsening drought grips the northern reaches of the US Great Plains.

The arid region, traditionally known as a wheat heartland, has seen corn and soyabean output boom in the past decade as seed technology improved. It remains a key source of much of the nation's smaller grain and oilseed crops, such as barley, sunflowers and oats.

Almost half of North Dakota has fallen into severe to extreme drought, the worst conditions in four years. The state and its neighbours are home to a more diverse farm landscape than many Midwestern states, with producers often planting five or six crops in a given season, increasing the impact of the dryness on a variety of agriculture markets.

Spring wheat futures are heading for a 32 per cent gain this month, beating 80 other commodities tracked by Bloomberg. Soyabeans and oats are also on the rise.

Dakota farmers grow winter wheat, corn, dry peas, sunflowers, malting barley and canola, and the year's rainfall is as much as six inches (15cm) behind normal in the area.

Spring wheat prices in Minneapolis have soared this month to a three-year high as US crop damage intensified and Canadian farmers planted fewer hectares than expected.

Oat futures in Chicago have climbed 11 per cent in June while soyabeans have advanced about 1.5 per cent.

While crop problems in the Dakotas haven't sparked a significant rally for corn or soyabeans, it "puts a little more pressure" on the rest of the Midwest to have favourable conditions, said Ted Seifried, chief market strategist at Zaner Group LLC in Chicago.

The two states account for about 10 per cent of the nation's corn plantings and 14 per cent of soyabeans this season, and some other areas, including Indiana, have also had low crop ratings after a soggy spring delayed planting and early growth.

North Dakota's drought could persist. This year through Wednesday, just under 4.9 inches of rain fell in Bismarck, or about 3.6 inches less than normal, according to the National Weather Service.

At the same time, high temperatures have reached 85 degrees Fahrenheit (29 deg C) or higher a dozen times, including one day when it reached 101. So far, average readings for June are 3.7 degrees above normal. BLOOMBERG