January 11, 2002

Market Advisor: Fewer Winter Wheat Acres Planted Than Expected

By George Flaskerud, Crops Economist
NDSU Extension Service

Winter wheat planted acreage for 2002 is expected to total 41 million acres, according to a USDA report released Jan. 11. This acreage is down only slightly from a year ago but considerably lower than a pre-report trade estimate of 41.88 million as compiled by Data Transmission Network.

The reduction in winter wheat acres occurred in the soft red winter and winter white areas. Soft red is down 4 percent and white is down 1 percent. Hard red winter is up 1 percent as a result of increases in Texas, Oklahoma and Montana that offset a large decrease in Kansas. USDA indicated that plantings in Texas and Oklahoma are rebounding from the lower acreage that resulted last year from dry conditions.

Durum acreage in Arizona and California is up 3 percent. Plantings are estimated at 179,000 acres versus 173,000 acres a year ago.

Ending stocks of wheat for the current marketing year ending May 31 are projected to decrease 16 million bushels from last month’s projection, according to a Supply and Demand Report also released by USDA on Jan. 11. Increased feed and residual use more than offset a decrease in seed use and increased imports. The seasonal average farm price is now projected to be $2.75-$2.85 versus the $2.75-$2.95 projection made a month ago.

For hard red spring wheat, ending stocks are projected to remain the same as projected a month ago; however, they are expected to increase for durum wheat from 20 million bushels to 23 million bushels. Increased imports and reduced domestic use accounted for the increase in durum wheat stocks.

The most significant change in ending stocks for the wheat classes occurred in soft red winter wheat. For that class, ending stocks are expected to drop 14 million bushels (18 percent) more than projected last month.

At the world level, ending stocks of wheat increased by almost 7 percent from the December estimate. The primary reason for the increase was India, which discovered an additional 8 million metric tons of wheat stocks.

For corn, the stocks-to-use ratio is projected to remain about the same as in December. Production was reduced and domestic use was increased but exports were reduced. The price outlook remained unchanged at $1.85-$2.15. At the world level, corn ending stocks are expected to decease only slightly, less than half a percent, compared to projections made a month ago.

For soybeans, the United States produced less and is using more than projected a month ago. As a result the stocks-to-use ratio tightened from11.6 percent in December to 10 percent in January. In spite of this decrease, USDA reduced the projected seasonal average price by a dime at both ends of the range. It now stands at $3.90-$4.70.

Increased competition from South America is a major problem for the soybean price outlook. USDA added a million tons to the production estimate for Brazil. Early-season prices have been lower than expected according to USDA which likely reflects the anticipated large South American crop.

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Source: George Flaskerud, (701) 231-7377, gflasker@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu