October 7, 2011


Rising Russian and US wheat plantings compensate threats



With rising Russian and US wheat plantings compensating threats to China and Pakistan, global wheat sowings for next year's harvests are to at least match those a year ago, according to the UN.


The UN's food agency, the Food and Agriculture Organisation, acknowledged the threat to US seedings from "exceptional dry conditions" in southern states, amid the planting season for winter grains.


"Unless significant rains arrive soon, it is likely that the winter wheat area will be significantly reduced in the affected areas," the FAO said.


However, weather allowing, sowings looked like improving on the historically weak 55.2 million acres planted for the latest harvest, let alone the 53.6 million acres for 2010's crop. In 2009-10, US wheat growers planted 59.2 million acres.


"In the US, early indications point to a considerable increase in wheat plantings for the 2012 harvest after relatively small areas in the past two years," the agency said.


In fact, forecasts point to southern states receiving some 0.5-2.5 inches of rain heading into the weekend, and many observers believe farmers will be keen to sow anyway, given insurance payouts of more than US$8 a bushel available on failed hard red winter wheat crops.


Meanwhile prospects looked "favourable" for India too, even if area elsewhere in Asia was under threat.


"Persisting dryness in parts of China and severe floods in the Sindh province of Pakistan could impact on the sown area in the affected regions," the FAO said.


And in the former Soviet Union, while Ukraine sowing was delayed by a dearth of rainfall, plantings were ahead in Russia.


"If favourable weather conditions remain in the next weeks, a significant increase of sown area under cereals is foreseen."


Overall, "with current wheat prices similar to their levels a year ago and utilisation expected to outstrip supply in 2011-12, the crop should remain an attractive option for producers".


Farmers "are expected to at least maintain similar areas of wheat as in the previous year, or in some cases increase it".


In the EU, as a bloc the top wheat growing area, sowings are expected to remain "similar" to those for the newly finished harvest.


"Conditions are generally favourable and, with wheat prices remaining relatively high, it remains an attractive option for farmers.


"A significant increase is unlikely due to rotational reasons and strong competition from other crops."