USDA wheat seeding forecast questioned

04.05.2018

The U.S. Department of Agriculture reports that three percent of the country’s spring wheat crop was seeded as of April 22, compared to the previous five-year average of 25 percent. | File photo

A United States wheat expert thinks there will be less spring wheat and more durum than the U.S. Department of Agriculture expects.

The USDA forecasts 12.6 million acres of U.S. spring wheat, a 15 percent increase compared to last year.

However, lacklustre prices and a late start to spring planting in the northern Plains since the report was released March 29 have analysts second-guessing that estimate.

“We are certainly thinking we could have that 10 percent increase but 15 (percent) seems a little bit strong,” said Jim Peterson, policy and marketing director with the North Dakota Wheat Commission.

That would shave 500,000 acres off of the spring wheat number.

Planting was about a month late in southern North Dakota and South Dakota. Farmers were still waiting for the ground to firm up in late April.

The USDA reports that three percent of the crop was seeded as of April 22 compared to the previous five-year average of 25 percent.

Daily temperatures for the first three weeks of the month were about 5.5 C below normal. There was still snow on the ground in some areas of northern North Dakota in late April.

“We kind of had February weather in April,” said Peterson.

He believes wheat lost some ground to soybeans due to the planting delays, a setback in wheat prices and “price resiliency” in soybeans.

Cash prices for spring wheat were about $5.50 a bushel in late April. Farmers wanted to see something in the range of $6.50 per bu. before making a big commitment to wheat.

But despite the disappointing prices and late start to planting, he doesn’t believe there has been a dramatic swing in acres.

Farmers in eastern North Dakota did all right growing the crop last year because their yields were good and the price was decent enough to provide competitive returns compared to duds like corn and malt barley.

Farmers in the western part of the state got half a crop due to drought last year but there is plenty of unused nitrogen in the soil, which favours coming back with wheat.

“There doesn’t seem to be a lot of wholesale switching of cropping choices yet,” said Peterson.

That could change in a hurry if seeding in the north is delayed until mid-May. Extension publications say the best wheat crops are planted before May 10 in southern North Dakota and May 20-30 in the northern part of the state.

The USDA’s durum estimate calls for a 13 percent decline in plantings to two million acres.

That was a controversial forecast. The trade was expecting 2.4 million acres, a slight increase over the 2.3 million acres planted in 2017.

Peterson believes the USDA’s estimate is far more realistic than the trade’s because growers are not pleased with the 2017-18 durum market.

“There is definitely a lot of frustration with some of the quality discounts and just the flat to declining price for much of the marketing year,” he said.

However, he believes the USDA estimate is overly pessimistic and that the reduction may be closer to 10 percent because there is more interest in durum in non-typical durum growing areas of Montana this year.


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