In spite of hopeful predictions made in light of recent weather improvements in key areas of the United States, the latest analysis from the US Department of Agriculture rates the country's winter wheat well below the five-year average.

Though the proportion of wheat rated as good increased overall, crop condition in 10 of the 18 reporting states declined over winter and overall crop rating was well down compared to last year.

Wheat rated as in good condition rose slightly over winter, up to 34 percent in March from 33 percent in November 2012. However, the figure still represents the lowest rating for the time of year since 2002. Furthermore, 30 percent of US wheat was rated as poor to very poor, compared to just 12 percent the previous year.  

The Crop Progress report revealed that wheat in Midwestern states is faring especially badly; a high percentage of wheat was rated poor to very poor in Colorado, South Dakota and Nebraska. All areas affected by last year's severe drought are struggling, including Texas in the South where crops remain 'excessively dry' according to USDA.

The situation remains worrying in the North despite heavy late-season snowfall which continued in the Midwest last week. Large areas of the South and Central United States remain in drought. Although winter wheat plantings are up 2 percent in the United States, the crops' future remains uncertain.

USDA officials said that, in badly affected areas, "significant soil moisture shortages negatively impacted crop condition during winter dormancy. In South Dakota, 76 percent of the winter wheat crop was reported in very poor to poor condition. Similarly, nearly half of the crop in Nebraska and Texas was rated very poor to poor."

Nevertheless, last week's USDA report on grain stocks revealed higher than anticipated wheat stocks (a three percent rise compared to last year) although wheat prices rose on the Chicago Board of trade following news of poor crop conditions on the Great Plains and in some Midwestern States.