Major wheat exporters will cut plantings by an area the size of Portugal, with US sowings hitting their lowest since at least the 1980s, but the slide will not stop world stocks rising for a third successive year.

Sowings in the five biggest exporting countries and regions for next year's harvest will fall by nearly 3.5m hectares as sagging prices prompt growers to seek more lucrative crops, Rabobank said.

"A fall in acreage is not surprising given wheat prices have fallen below the cost of production in a number of regions during the 2009-10 season," the bank said in its first estimate of global crop sowings.

In Europe, prices are "only marginally above" the cost of production for French and German farmers despite a 12% rally in Paris since mid-September.  

'Strong competition' 

The decline would be particularly notable in Canada, Ukraine and the US, thanks to "strong competition from other cropping alternatives, together with planting delays and reduced availability of credit".

American farmers would slash sowings by 4.7m acres to 54.4m acres (19.6m hectares), the lowest for at least 20 years.

European cuts would be relatively modest, at 444,000 hectares, because of the even poorer margins to be gained from barley, a major alternative, which will lose even intervention support next year.

Stocks rise 

However, global wheat sowings would fall by only 1.5m hectares, with the fall in the major exporters offset in part by higher Chinese and Indian plantings.

"This will result in a third successive season of building world wheat stocks, which are estimated to reach the second highest level in a decade."

The stocks-to-use ratio, a key measure of market tightness, would remain at 24%, "maintaining a burdensome wheat balance sheet for a further 12 months".

Switch to corn 

The biggest beneficiary of the switch out of wheat would, in the US, be corn, where plantings are expected to rise by 858,000 hectares (2m acres) to 88.7m hectares, the second biggest figure in history.

US soybean plantings would fall by 1.8m acres to 75.7m acres after a bumper South American harvest eases the market squeeze supporting prices.