Wheat industry eyes world supply, prices
Updated: Wednesday, October 19, 2011 10:59 AM
U.S. report predicts higher prices for wheat, drop in corn production
By MATTHEW WEAVER
STEPTOE, Wash. -- Only patches of spring wheat remained to be harvested the afternoon of Sept. 6 as Todd Imeson's crew moved from one field to another.
"We have little pieces of wheat left all over," employee Jim White said. "We've probably got a day's worth of harvest, but they're in all these little patches. It might take us two or three days to get to them all."
White expected to begin planting the winter wheat this week or next.
As the 2011 harvest nears its conclusion, many farmers across the Pacific Northwest are beginning to turn their thoughts to planting.
The winter wheat harvest is finishing up, but spring wheat harvest is about 20 percent behind normal, said Glen Squires, vice president of the Washington Grain Commission.
Planting of winter wheat is on track, with about 15 to 20 percent of the crop already in.
Blake Rowe, CEO of the Oregon Wheat Commission and Oregon Wheat Growers League, doesn't expect winter wheat acreage to change from last year. In 2011, the Pacific Northwest seeded about 3.4 million acres of winter wheat, according to the USDA National Agricultural Statistics Service.
Spring wheat sees larger fluctuations in acreage, Squires said, as farmers tend to make planting decisions based on price.
Prices are about $7 per bushel, a relatively "robust" price for harvest time, Squires said. "Because of higher prices, we're likely to see more wheat next year."
The Sept. 12 World Agricultural Supply and Demand estimate from the USDA calls for higher wheat prices and less corn production.
Global wheat supplies for 2011-12 are projected to be 7.6 million tons higher, mostly because of larger beginning stocks in Canada and increased production in Canada, the European Union and Ukraine.
U.S. wheat food use is projected to be 5 million bushels lower, based on mill grind estimates and reduced prospects for per capita flour consumption for 2011.
U.S. exports are projected to be 75 million bushels lower with more exports expected from Canada and the European Union.
But a smaller corn crop will continue to bolster wheat prices, analysts said.
The U.S. season-average farm price projection for all wheat is projected at $7.35 to $8.35 per bushel, up from $7 to $8.20 per bushel from the previous month.
The report calls for lower U.S. corn production in 2011-12, a drop of 417 million bushels from last month, with expected yields down across most of the Corn Belt. The national average corn yield is forecast at 148.1 bushels per acre, down 4.9 bushels from August and 16.6 bushels below the 2009-10 record.
The season-average corn farm price is projected to be $6.50 to $7.50 per bushel.
"Everyone in the U.S. grain industry is focused on what the size of the U.S. corn crop is going to be," said Russ Braun, grain division manager for Primeland Cooperatives, Lewiston, Idaho.
Planting conditions in the southern U.S. are some of the poorest in years, Braun said. Both factors have the potential to cause large market swings.
DTN meteorologist Bryce Anderson said current weather patterns trend toward La Niña conditions and above-normal moisture in the Pacific Northwest and Northern California.
He pointed to excessively dry conditions in the eastern Midwest and severe dry conditions in the Southern Plains and southeast, with near-normal conditions in the northern U.S.
Anderson predicted reduced winter wheat acreage for 2012 in the Southern Plains due to soil moisture deficits.
World Supply and Demand Estimates: www.usda.gov/oce/commodity/wasde