From staff reports The USDA last week released its yearly Prospective Plantings and quarterly Grains Stocks reports, providing insight to U.S wheat importers as they look toward the 2024 harvest.
Estimates put the total U.S wheat area at 47.5 million acres, a 4% reduction from last year. Winter wheat plantings fell by 7%, Hard Red Winter (HRW) wheat by 5%, Soft Red Winter (SRW) by 15%, and white wheat by 2%. However, Hard Red Spring (HRS) planting area should increase by 2% and durum may even rise by 22%.
When the 2023 winter wheat crop was seeded in 2022, income potential looked promising as prices were elevated by Russia’s invasion of Ukraine. Thus, the total seeded area for 2023 was up by 8% since the prior year.
Although 2024 wheat area is down from last year, the overall area remains 2% higher than the five-year average, representing the second-largest area since the 2018-19 season.
Favorable prices for durum over spring wheat may incentivize producers to substitute durum acres for HRS. As of April 3, the average country elevator bid for durum is $9.88/bushel, while HRS sits at $5.92/bu.
Farmers have been increasingly rotating crops to manage risks and disease cycles, reducing the influence of price fluctuations on seeding decisions. This season, soybean planting is expected to rise by 3% to 86.5 million acres, while corn planting may decrease by 5% to 90 million. However, the overall distribution of wheat, corn and soybean acreage remains relatively stable, with wheat and corn holding at 15% and 29% respectively; soybeans slightly above the long-term average of 28%.
Released on March 28, the quarterly USDA Grain Stocks report put total wheat stocks at 29.6 MMT(million metric tons), as of March 1. On-farm stocks were around 7.4 MMT, up 16% from the previous year, while off-farm stocks were 22.2 MMT, up 14%.This marks an 18% rise from 2023-24, the first increase since 2015-16.
Lastly, increased wheat production will help loosen the U.S. balance sheet and diminish supply-related price pressures. However, U.S wheat stocks are still among the lowest levels in recent years. Globally, wheat consumption is higher than production, leading to a low global stocks-to-use ration.