December 9, 2011


US wheat leads in global wheat sowings for 2012



US wheat is in the lead for a rise in world wheat area for the 2012 harvest because of favourable weather.


The United Nations' food agency, the Food and Agriculture Organization (FAO), backed observations from the likes of the International Grains Council of a rise in world wheat seedings for 2012-13, saying growers "are expected to maintain, or even increase," area.


"With current wheat prices similar to their levels a year ago, the crop should remain an attractive option for producers," the FAO said.


The increase would be particularly marked in the US, "where early indications point to a considerable increase in the wheat plantings for harvest in 2012, contrasting with the relatively small coverage in the past two years."


The comments came as PotashCorp, the fertiliser giant; forecast a 7.5% jump to 58.5 million acres in US wheat sowings for 2012, eclipsing increases in seedings of corn and soy.


"Approximately seven million acres are expected to exit the US Conservation Reserve Program this year with most of that land expected to be planted to wheat," PotashCorp said, a reference to the more than 30 million acres of US farmland tied up in environmental schemes.


Other observers have a more conservative estimate of the amount of land which will be released for cropping from the programme, with University of Illinois farm economist Darrel Good putting the drop at a net 1.6 million acres.


And Morgan Stanley, while also forecasting a rise in US wheat seedings, sees a more modest increase, of 1.1%.


However, the FAO said that prospects for wheat seedings had been enhanced by the persistent dry conditions in the US southern Plains.


The lack of moisture faced by hard red winter wheat, the region's predominant variety, forced growers to abandon one-quarter of their crop, with the yield on what was harvested down 14% year on year.


Furthermore, autumn-planted seedlings for the 2012 harvest are heading into winter in worse-than-average condition.


But other crops would have fared even worse, the organisation said.


"Although continuing high wheat prices will undoubtedly have contributed largely in encouraging farmers to increase their wheat areas, on-going dryness in the central and southern Plains may also be playing a part.


"Where soil moisture is limited, wheat tends to be the preferred option rather than other crops such as corn or soy that have a higher moisture requirement."


PotashCorp's sowings estimate also supported an idea proposed by fertiliser peer CF Industries a month ago that corn area will hit 93.5 million acres, potentially eclipsing the post-War high of 93.53 million acres reached in 2007.


"Strong corn prices continue to incentivise increased corn acreage around the world, including the US," PotashCorp said.


In soy, it saw a smaller rise in seedings, saying that "given the increasing competitiveness of South American soy in the export market and increased acreage in that region, US acreage is expected to remain relatively flat in 2012".


The overall area sown to the weight major crops, which also include barley, cotton and rice, will rise by 6.5 million acres to 255.8 million acres, the group forecast.


Professor Good, while failing to make estimates, also foresees an increase in overall US seedings, while citing the relatively high proportion of plantings prevented by poor weather this year.


Insurance claims against abandoned sowings hit 9.6 million acres this year, more than twice the level in 2008.

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