By Jesse Newman
CHICAGO--U.S. farmers likely seeded the fewest acres of winter wheat in over a century this season, pulling back on plantings amid a world-wide glut and a steep slide in prices, according to analysts surveyed by The Wall Street Journal.
The U.S. Department of Agriculture in an annual report Thursday is expected to show wheat farmers planted 34.2 million acres with winter varieties last fall, marking the fourth straight decline and a more than 5% drop from a year earlier, the analysts said. If realized, it would be the lowest winter wheat acreage the nation has seen since 1913.
A bumper U.S. crop and record supply of wheat around the world pushed prices to a 10-year low last year, while exports -- which hit a four-decade lowlast season -- have also been slow.
As a result, analysts expect the USDA to peg plantings of hard-red winter wheat, the type grown in the southern Plains and used to make bread, at 25.1 million acres, a more than 5% decline from a year earlier, according to the survey. Soft-red wheat, which is raised in the eastern Midwest and used in cookies and cakes, was likely seeded on 5.6 million acres, down nearly 7% from the year prior. Pacific Northwest growers likely planted 3.5 million acres of white wheat, unchanged from a year earlier, according to analysts.
"You could make the case that wheat is the next oats," said Dave Marshall, farm-marketing adviser at TCFG LLC in Nashville, Ill., noting that while oats were once widely grown on U.S. farms, they have since become a niche crop.
In separate reports Thursday, the USDA is expected to estimate domestic wheat stockpiles on Dec. 1 at 2.044 billion bushels, up 17% from the same date last year, according to analysts. Inventories at the end of the current crop year next May will likely be projected at 1.148 billion bushels, analysts said, an increase of more than 17% from the season prior and the highest in nearly 30 years.
"We keep growing less and less wheat but carry-out stocks don't reflect it because there's no industrial use and exports have been just dismal," said Mr. Marshall.
The USDA will also likely forecast ample U.S. corn and soybean supplies thanks to record harvests of those crops, according to surveyed analysts.
Federal forecasters are expected to show U.S. farmers brought in a record 15.198 billion bushels of corn last autumn on yields of 175.3 bushels an acre, analysts indicated. That would be a slight decrease from the government's November estimate for 15.226 billion bushels.
Conversely, analysts expect the USDA to raise its estimate for U.S. soybean production, pegging output last year at a record 4.380 billion bushels on yields of 52.7 bushels an acre. That would be up from the agency's latest forecast for 4.361 billion bushels.
"Soybean yields were extremely good," said Mr. Marshall, adding ample rain in the late summer and early autumn last year "meant beans are every bit as good as what USDA had forecast in November" and maybe better.
Soybean reserves on Dec. 1 are anticipated at 2.951 billion bushels, up nearly 9% from a year earlier, on account of bigger U.S. output, analysts said. Stockpiles at the end of the 2016-17 crop year in August will likely total 468 million bushels, down from December's projection of 480 million, but more than double last year's figure, they indicated.
The USDA is expected to peg corn inventories at the beginning of December at 12.358 billion bushels, almost 10% more than the year prior. Reserves on hand in August will likely total 2.396 billion bushels, which would be the highest in nearly three decades.
Write to Jesse Newman at email@example.com
(END) Dow Jones Newswires
January 10, 2017 19:00 ET (00:00 GMT)
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