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| Trend of higher wheat sowings to lift US area by 2m acres By Agrimoney.com - Published 05/09/2012 |
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US farmers, blessed at
last by rains in many areas, are to lift winter wheat
sowings for the 2013 crop, in a pattern which may be repeated through other
major producing countries too. Farmers in the US,
the world's top wheat exporter, are to plant an extra 2m acres with the
grain, above the 56.0m acres sown for this year's harvest, Mark Welch, grain
marketing economist at Texas A&M University, said. "If they get the
rainfall, they will plant the wheat," Dr Welch told Agrimoney.com, a pattern likely to be repeated through many other northern hemisphere growing
regions, through to southern Russia. "Most fall planting
areas in the northern hemisphere are not currently in one of the drought
classifications," he said, comparing data from a global drought monitor, kept
by University College London, with the map of major production areas. 'Optimal moisture levels' Indeed, in Ukraine,
which like the US suffered drought damage to its harvest this year, UkrAgroConsult
analysts has termed surface soil moisture levels as "optimal".
Currently, Ukraine
farmers are expected to sow at least 8.2m hectares with winter grains for 2013
harvest, which could represent a small fall on the 8.4m hectares last year, although growers
may increase their outlay if encouraged by continuing high prices. In Russia - where a rejection of export curbs is seen as supporting drought-hit growers' hopes of making up in higher prices what they have lost in yield - farmers are expected to
sow 16.8m hectares with winter grains, up from 16.1m hectares last year. 'Primary driver…' However, in the US,
there some dispute about where extra wheat area will be.
While many growers are set to react to high prices by increasing crop area, the South contains many areas too dry to support corn and soybeans, potentially more profitable alternatives, and looks set to see many acres switched from cotton, given poor profitability prospects. Farmgate cotton
prices are set to fall up to 30% in 2012-13, on US Department of Agriculture
estimates. "Our research shows
that the primary correlation with what farmers plant for next year is the price
they got this year," Dr Welch said. "That seems to be
the primary driver in their decision making." Herbicide hangover Indeed, it is also a factor which, in the Midwest, may see growers stick with spring-seeded corn and soybeans - for which prices are close to record highs, unlike those for wheat - even though rains left in the trail of Hurricane Isaac have vastly improved soil moisture for autumn-sown crops, Dr Welch said. The Midwest is home to soft red winter wheat, a lower protein type used in part in feed, and traded in Chicago. At Allendale, Paul
Georgy, the broker's president, said that the 3-5 inches of rain
received on many farmers had been "a supportive factor for soft red winter
wheat" sowings, but adding that he did "not expect a large increase in area". In part, this thinking is
based on crops' relative prices, with wheat's returns likely "not looking
real impressive" compared with those from growing corn and soybeans. However, there is
an agronomic factor too, another hangover from this year's drought for growers
seeking to sow wheat, as often done, as a follow-on crop from soybeans. "There is a concern
that some winter wheat growers have that the chemicals, herbicides used for
soybeans, there has not been enough rain to break them down." And these
weedkillers could be fatal to wheat seedlings. Seed market signal Yet there is some evidence that many soft red winter wheat growers do not hold these fears. "Seed retailers are
saying they have sold more soft red winter wheat seed than last year," Dan
Cekander, director of grain market analysis at broker Newedge, said. Soft red winter
wheat acres "will be higher", he said, supported in part by double cropping
with soybeans – in which growers plant a follow-on crop of soybeans after the
wheat is harvested. While coming with a
yield penalty on soybeans, this strategy offers farmers a chance to tap
elevated prices of both crops, and exploit rains which have done a "good deal
to rebuild soil moisture". "Illinois had more than
three inches of rain – there is not a puddle anywhere. It just soaked in." |
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