News
22.02.2010
US wheat harvest to slump 12% this year, USDA says
American farmers will harvest a record corn crop this year, but in part at the expense of wheat production, which will slump by 12%, the US Department of Agriculture has said.
The USDA has pegged the corn harvest at 13.16m bushels, 200m bushels more than proposed earlier this month in its so-called baseline forecast.
The rise, which puts the crop marginally ahead of last year's, was attributed in part to cheaper fertilizer costs, a particularly big input cost for corn.
"Net returns to corn production are expected to be much improved from 2009 as fertilizer prices have fallen from their highs during the fall and winter of 2008-09," the USDA, adding that it was nonetheless factoring in a "return to trend yield" from last year's bumper result.
The department also edged its forecast for soybean output 30m bushels higher to 3.26bn bushels, while noting the crop would lose acreage to corn and cotton.
Out of favour
However, the estimate for wheat production was lowered by 55m bushels (7.4m tonnes) to 1.945bn bushels (52.9m tonnes), reflecting a plunge in plantings.
Output at that level would mean a slump of 12.2% in US wheat harvest this year, taking the equivalent of an Argentine crop out of its production.
It would almost certainly mean America falling further behind Russia in the global wheat output league.
Russia is expected in 2009-10 to have taken the third spot from the US among producing countries, behind China and India.
US farmers cut winter wheat sowings to their lowest since 1913 because of weak prices, and delays to autumn corn and soybean harvest which left fields tied up with standing crops.
"The sharp reduction in winter wheat area cannot be completely made up by spring plantings," the USDA added.
Missing acres
The report also underlined the healthy prospects for US cotton output, which is expected to rise by 29% to 16.0m bales this year, encouraged by prices boosted by tight supplies at a time when global economic recovery is boosting demand.
"Less land is expected to be cropped in 2010 as prices continue to ease from their record levels," the USDA said,
However, many analysts questioned estimates that overall plantings of major crops would fall far this year, noting the considerable amount of land emerging for planting from conservation programmes.
"The surprise is that the USDA said this next year in all eight commodities... that acres would be down 6.5m acres," broker US Commodities said, quoting a figure adjusted for conservation acres.
The USDA report said that wet autumn weather "provided little opportunity to put idled land back into production and historically only a limited portion of former [conservation programme] land actually returns to production, particularly in the first year".
Soybean stocks
A forecast of a rise in US soybean inventories to a four-year high of 330m bushels by the end of 2010-11, below trade estimates of 600m bushels, also provoked questions.
"The USDA is using a very strong demand base," US Commodities said.
The report added that "intense competition from Argentina and Brazil in 2010-11 is projected to scale back US exports of soybean meal and soybean oil from this year's record levels".
Agrimoney
