Wheat acreage does not increase, shortages again?

At the current price level, it is quite conceivable that arable farmers will opt for wheat en masse this autumn. We made one before analysis about. For countries in the European Union, that conclusion remains for the time being, although there are alternatives. The area of rapeseed also increases. In France possibly even 20%. With a market price of around €600 per tonne, it is an attractive alternative to wheat.

Less wheat
This consideration is not made everywhere. As we indicated in our previous wheat analysis, analysts expect winter wheat acreage in Russia to shrink. That writes news agency Reuters. To start with, there is the uncertainty due to the export tax on this crop. Although the amount has fallen slightly to $50 per ton, the uncertainty in the chain remains. It puts Russian wheat in a less competitive position. With alternatives such as sunflowers and grain maize, there is a choice for the agricultural entrepreneur.

Another factor that currently plays an important role is the weather conditions. Continued drought is causing farmers to wait to sow wheat. This is most common in central Russia and the south of the country. Rain has recently brought some relief locally, but still not enough everywhere. On September 20, 9,2 million hectares of winter grain were in the ground. Last year it was 9,3 million hectares. There is now a delay, mainly due to drought in the Volga region.

Area shrinking
Market bureau Sovecon thinks that the area of ​​winter wheat will decrease by 500.000 to 1 million hectares. Colleague IKAR is a little more careful and keeps it at 500.000 hectares. In 2021 the area of ​​winter wheat amounted to 17,8 million hectares. Oilseeds in particular are popular with growers. More processing capacity is available in the country and prices are good. The Russian Ministry of Agriculture confirms that sowing is being delayed due to drought, but the ministry does not want to say how many hectares are involved. It will take until November for figures to become available.

Meanwhile, wheat prices in Russia have continued to rise above $300 per tonne FOB. This is the tenth increase in a row. The physical market thus follows the price increases that were previously implemented in Chicago and Paris at the end of last week.

Perfect conditions in Ukraine
Ukraine was the only country to have a top harvest last season. The conditions for sowing winter cereals are now better than in Russia, although most of the work has yet to begin. According to the agriculture ministry, the first 13% of the acreage was in the ground on 5 September. It is estimated that 7,84 million hectares of wheat are sown. The amount of soil moisture is called ideal, unlike last season. Then less winter grain was sown due to drought. The country is still heading for a record grain production of 80,6 million tons this season.

Arable farmers in the US are also thinking about the next season. Corn, soy, wheat. All 3 crops offer good opportunities. The problem is, the ground just isn't there to expand into anything. The cost price and market opportunities therefore play an important role in growers' choices. Farmers in the US are also struggling with significantly increased costs. Especially for fertilizers.

More wheat in US
The sowing of winter wheat in the south of the US is now in full swing. The final decisions will be made here over the next 2 to 3 weeks. Expectations for the crop are good, which means that the acreage could increase further. Polls now come up with an acreage increase of 6,3%.

An initial estimate is based on a combined area of ​​234,8 million hectares for maize, soybean and wheat, or 95 million hectares. That is the third largest acreage ever. Only in 3 and '1981 more hectares were cultivated with these crops. According to arable farmers, the expansion should mainly come from a smaller area of ​​forage crops, because fewer animals are kept. Where possible, growers opt for a double crop of winter wheat followed by soybeans.