October 5, 2012

 

 

 

In the south east of the EU, "hot, dry weather has reduced soil moisture, and significant rainfall will be needed to replenish normal levels for establishment" of winter crops in countries such as Hungary and Romania, the FAO said.

 

In Russia, "soil moisture levels still remain low in some key growing southern areas," whose drought this year has been a major factor in curtailing exports from a country which typically provides a source of ample competitively-priced grain.

 

Indeed, the weak exportable surplus of wheat in the former Soviet Union has "strengthened domestic prices of main staple wheat flour in importing countries", contributing to a gain in world food prices last month.

 

However, overall Russian sowings of winter wheat, which accounts for some two-thirds of the country's wheat production, are "progressing well under generally satisfactory weather conditions", the FAO said, flagging forecast of winter grains area remaining stable at about 16.8 million hectares.

 

In neighbouring Ukraine, "planting got off to an early start, favoured by beneficial rains during late August in the majority of grain-producing regions", the exception being some "key" southern areas, where soil moisture levels remain low. Winter grain sowings are expected at an "average" level of 8.1 million hectares.

 

In the US, the arrival of "much-needed" rains last month had improved soil conditions, the FAO said, flagging USDA data showing only a small lag in planting progress behind typical levels. And in the EU, the world's biggest wheat producer, planting conditions "are generally favourable".

 

The decent conditions boded well for sowings at a time when elevated prices were giving growers a firm incentive to plant wheat, the FAO said.

 

Wheat remains an attractive option for producers. Thus, weather permitting, world plantings are expected to at least match those of last year. This alone could result in a significant increase in next year's global wheat output, assuming growing conditions return to normal in areas affected by drought in 2012, and satisfactory growing conditions in the other key producing countries.

 

Very early indications for wheat crops in 2013 are encouraging, after a 2012 harvest which the organisation pegged at 663 million tonnes, a 5.2% drop on-year.

 

The comments follow a forecast last week by the International Grains Council that wheat harvested area for next season's harvests would increase by 2.0% to 223.2 million hectares.

 

"Winter wheat planting for 2013-14 is well underway in the northern hemisphere, and farmers are expected to increase sowings, driven by both firm prices and a recovery from the adverse weather conditions the previous year, notably in the former Soviet Union," the council said.

 

Indeed, the IGC forecast a rise in sowings in Russia and Ukraine, as well as in Argentina, where plantings for 2012-13 fell to a multi-decade low as farmers switched to barley, for which the country's export restrictions are not as severe, so opening up the potential for better returns.

 

Separately, Agritel on Thursday (Oct 4) flagged improved sowing conditions in France, the EU's top wheat producer, after an unfavourably dry period during the seeding window for rapeseed, which is planted earlier.

 

In Russia, farm operator Ros Agro said on Wednesday (Oct 3) it had completed sowing nearly 100,000 hectares of winter wheat.