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Slow U.S. winter thaw needed to avoid more wheat damage: USDA

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[March 04, 2014]  By Colin Packham

CANBERRA (Reuters)  A gradual end to the U.S. big freeze is needed to prevent further damage to the country's wheat crop, the chief economist at the U.S. Department of Agriculture (USDA) said on Tuesday.

U.S. wheat futures have firmed in recent weeks amid concerns over potential curbs to yields as a result of cold weather across the U.S. plains.

"The persistence of winter has been a problem...," said the USDA's Joseph Glauber at a commodities conference in the Australian capital Canberra.

"We have had snow cover over a lot of the regions and to a degree that has protected things, but the concern is that when you have a bit of warm weather and wheat popping out of dormancy," he said, referring to the risk that short-lived warmer weather could melt snows and could encourage growth that could be damaged by further cold snaps.

Cold weather again returned to U.S. this week, with a deadly winter storm hitting the U.S. east coast on Monday, cancelling about 2,900 flights, shutting down Washington and closing schools and local governments.

The condition of the U.S. plains winter wheat crop has dropped due to frigid temperatures throughout February and dry soils, U.S. government data released on Monday.

In Kansas, the largest production state for winter wheat, the crop was rated 34 percent good to excellent, down 1 percentage point from a month earlier.

Nebraska's winter wheat crop was rated 43 percent good to excellent, a 3 percentage point drop from the start of February.

The ratings decline was greater in southern areas of the winter wheat belt, where soils were drier and the crop was more susceptible to the cold.

"We still have a lot of dryness in the southern plains, that is the other main concern," Glauber told Reuters.

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Texas winter wheat was rated 15 percent good to excellent compared with 19 percent a week ago.

U.S. March wheat futures surged nearly 5 percent on Monday as tensions in Ukraine raised fears over potential disruptions from the Black Sea, one of the world's key grain exporting regions.

Glauber said he understood the market fears, but said it was too early to speculate on the impact on global trade.

"I'm sure there is a lot of concern because it is such an important producer in the world market," said Glauber. "Stocks are surprisingly tight, we've had global record production but we've had record consumption," said Glauber.

(Editing Michael Perry)

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