World wheat sowings will see "only modest" growth despite
the lure of higher prices, the International Grains Council said, seeing area
in the European Union, the top grower, as "broadly unchanged".
The International Grains said that world wheat prices are "more
than 10% higher year on year as northern hemisphere growers plant winter crops"
ahead of the 2018 harvest.
The IGC's wheat index estimates wheat prices up 14.6% year
on year, including a 5.4% rise over the last month on factors such as "currency
movements, weather concerns and logistical constraints".
However, "partly because of currency movements, returns are
still unattractive for many producers and only a modest area expansion is
Overall wheat area has in recent years come in at a little
over 220m hectares on IGC estimates.
In the European Union, the world's top wheat producer, area
is seen as "broadly unchanged year on year", with growers facing "few
profitable alternatives" to the grain.
"Following a recent drought, additional rains are needed in
several southern member states."
In the US, meanwhile - where all-wheat sowings of 45.7m acres
for this year's harvest were the lowest on plantings data going back to 1919 - the
IGC said that area was "projected to increase only marginally" for 2018.
On the former Soviet Union, the IGC gave no forecasts of
acreage, although flagged that "low soil moisture was a concern in eastern and
central parts of Ukraine", with conditions "unfavourably dry in parts of
southern Russia" too.
Earlier this week, SovEcon told Agrimoney.com that there was
a potential for Russian winter wheat sowings to exceed the 18.1m hectares
seeded for the 2017 harvest which, including spring crop, is estimated at the largest
Rapeseed vs wheat
The comments come amid growing market talk over winter wheat
sowings, with the northern hemisphere plantings .
In the EU, there has been some speculation of growers switching
some land from wheat to rapeseed, given price differentials late last month,
when seedings of the oilseed, which has an earlier planting window than wheat,
were in full flow.
The ratio of November 2018 rapeseed futures to December 2018
wheat futures in Paris ended last month at 2.06, ahead of the average of
roughly 1.95 for the time of year.
The ratio has since eased back to 2.01, as rapeseed prices have
taken a knock from a cut to EU tariffs on imports of biodiesel (made from
vegetable oils) from Argentina.
'Not a slam dunk'
In the US, Tregg Cronin at broker Halo Commodity Company noted "lots
of conjecture about the amount of winter wheat acres which will be seeded this
fall with opinions all over the board.
"When wheat futures were significantly higher earlier this
summer, it seemed a sure thing we would see a meaningful increase in hard red
winter wheat and soft red winter wheat acres seeded this fall."
However, with current relations between futures prices for 2018
crop corn, soybeans and wheat, such an increase "is not a slam dunk".