Poor Price Outlook May Mean Less U.S. Winter Wheat

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Wet fields and weak prices amid already ample world wheat supplies could spell fewer U.S. winter wheat acres planted this fall.

Despite some of the best soil moisture seen in years, many farmers in key U.S. growing areas last week were either still evaluating how much wheat to plant or were planning to sow fewer acres to wheat.

“With wheat prices as low as they are… we anticipate there will be fewer wheat acres planted this fall,” said Bill Spiegel, a spokesman for the Kansas Wheat grower group. “There are a lot of farmers who are discouraged.”

Kansas is the largest U.S. wheat producer, and farmers in this central U.S. state harvested 8.8 million acres totalling 369.6 million bushels of winter wheat this summer out of a total U.S. harvest of about 1.5 billion bushels.

But large world supplies and lacklustre demand has weighed on the market and prices have been in decline since 2008 when the global wheat crop hit a record 682 million tonnes.

The current benchmark wheat futures contract at the Kansas City Board of Trade shows a contract high of $11.45 per bushel, but prices slid Sept. 22 to $4.66-1/4, just above the contract low of $4.63-1/2.

The U.S. Department of Agriculture warned earlier this year that if farm gate prices for wheat continue to fall, without a similar decline in prices for inputs the U.S. wheat sector may see further attrition of planted areas.

The USDA has pegged the average 2009-10 farm price for wheat at $4.70 to $5.50 per bushel, compared to the 2008-09 average of $6.78 per bushel.

Kansas grower Terry Hamilton, who farms east of Wellington, Kansas, billed as the “wheat capital of the world,” said a disappointing harvest this summer and the current low prices meant he was planning to put 20 per cent fewer acres to wheat this year.

Price was also a key reason central Kansas farmer Tom Morton said he is likely to plant 10 per cent fewer wheat acres this fall.

“The priority just isn’t there as it has been in the last few years,” Morton said.

Wet weather of late through the Plains has been both a blessing and a curse. Though the added soil moisture should benefit newly seeded wheat, the wet conditions were delaying harvesting of row crops like corn and soybeans, which growers in parts of the Plains often double crop winter wheat behind.

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