A jump in wheat plantings in North America, in response to soaring prices, could be "just around the corner", Macquarie analysts warned, even as Russia cautioned that its winter plantings may slump by one-third.

US growers, whose distaste for the weak prices before July sent wheat sowings to their lowest for nearly 40 years, looked poised to restore to the grain all the 5m acres lost.

"It is clear that the deferred wheat premiums to corn and the improving wheat price relative to soybeans have caught farmers' attention," Macquarie said in a report.

Indeed, the growing desire for wheat in the US, the top exporter of the grain, "could pose challenges" to the expansion in corn sowings needed to avoid the development of a "very tight US corn balance sheet".

"This means that this wheat rally… increases our bullish bias for corn prices into early 2011," the bank added.

'Real contender'

Farmers in Canada, the world's second-ranked exporting country, looked likely to reverse an increasing preference for canola and pulses encouraged by the weakness in wheat prices until July.

"We would expect to see a much different situation next spring, with wheat now a real contender for area," the Macquarie said.

"Overall, although this rally signals a very real concern over this year's wheat stocks, a supply response could be just around the corner," the briefing concluded.

The comments were echoed by Commerzbank analysts, who said that winter wheat acreages were poised to expand "significantly" in northern hemisphere producing countries.

"This is especially true for the US," the bank said, adding that it expected the raised sowings to depress wheat prices to $6 a bushel in Chicago, and E165 a tonne in Paris, by the end of the year.

Autumn vs spring

Separately Viktor Zubkov, Russian deputy prime minister, said that the country's own sowings of winter grains for next year's harvest would slump by one-third to 12m hectares.

The lack of soil moisture which has ravaged this year's crop has also provided poor conditions for an autumn planting season which would, in a normal year, begin next week.

Crops in many areas of Russia need a head start to ensure they are in a fit-enough condition to make it through the winter.

However, lost sowings could be brought back into production after the winter, Mr Zubkov added, saying that "6m hectares will have to be sown with spring grains".

Spring wheat typically offer lower yields than winter-sown varieties, but tends to offer higher quality.


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