COLUMBUS – The lowest projected winter wheat plantings in 30 years could give some lift to wheat prices by summer harvest. That’s how Ohio State agricultural economist Allan Lines read the monthly crop production report released Jan. 11 by the USDA.
Farmers planted an estimated 2 million fewer acres of winter wheat – 41.3 million acres – the lowest since 1971, Lines says. Combined with increased domestic usage and somewhat better exports, new-crop ending wheat stocks could decline to 725 million bushels – an 11 percent drop – from the expected 814-million-bushel carryout.
Lines attributes the fewer plantings to the government’s more attractive marketing loan rates for soybeans. Farmers likely have decided to shift wheat acres into soybeans, he says. Any crop damage in the coming growing season could cut into production and shake up prices again, Lines says.
USDA projects a 2000-01 wheat price range of $2.55-$2.75 per bushel, a nickel higher than projected last month and better than the old-crop price of $2.48.
“The question I have on the wheat side is, ‘Will this continue?’ And I believe it looks like it will continue,” Lines said. “That means we shouldn’t make any hasty decisions about locking in a forward contract price on wheat.”
Ohio growers seeded 1.01 million acres of winter wheat last fall, or 10 percent fewer acres than in fall 1999, when 1.12 million acres were sown, according to the report. Indiana winter wheat acreage has steadied at 550 million acres for the last three fall plantings.
The report held less optimism for corn, even though USDA reduced the crop size by 6 percent from its December report. This still will be the second-largest crop at 9.6 billion bushels, with a national yield of 137.1 bushels per acre. The record production is 10.1 billion bushels set in 1994. USDA did not change its price outlook from last month, projecting a range of $1.65-$2.05 per bushel, compared to the $1.82 per-bushel estimate for old crop.
Export-wise, foreign buyers are still shying away from U.S. corn because of the controversy surrounding the genetically modified StarLink corn. StarLink was not approved for human consumption but found in human food supplies.
The soybean market was disappointed in the numbers presented in the report, Lines says. Most analysts were looking for continued reduction in the bean crop. The continued projection of a record soybean crop of 2.8 billion bushels presented a dismal view, he says. USDA made no change in ending stocks of 320 million bushels since last month, which is 30 million bushels above the old crop carryout.
Soybeans were unable to sustain the recent demand euphoria over Europe’s ban of meat and bone meal from livestock feed due to concerns about the “mad” cow disease, Lines says. The concerns showed up in reduced need for foreign soymeal as a livestock feed and reduced meat exports to the continent.
“We are now approaching the time where we will be confronting the South American crop, and it’s reported to be in good shape,” Lines said. “This bean market doesn’t have room to recover.”
As for state corn production figures, the 2000 production estimates for Ohio and Indiana were, respectively, 485.1 million bushels and 815.9 million bushels – increases of 20 percent and 9 percent from 1999. The 2000 state corn yields were 147 bushels per acre for each state, or a 21-bushel-per-acre increase for Ohio and a 15-bushel-per-acre increase for Indiana, compared to 1999.
Soybean production for 2000 was 186.5 million bushels of Ohio and 258.9 million bushels for Indiana, up 15 percent and 19.6 percent, respectively, from 1999. State soybean yields were 42 bushels per acre for Ohio, and 46 bushels per acre for Indiana, up six bushels in Ohio and seven in Indiana.