Source: U.S. Wheat Associates, Wheat Letter

U.S. WHEAT ACREAGE DOWN 3 PERCENT

According to a report issued earlier this week by the U.S. Department of Agriculture, American farmers planted 59 million acres of wheat during this crop year, down 3 percent from 2003. Harvested area is expected to total 50.7 million acres, down 4 percent. Last year, U.S. farmers harvested 52.8 million acres of wheat, producing 63.59 million metric tons. Of total U.S. wheat production, 49.3 percent (31.34 MMT) was exported during the marketing year 2003/04.

The 2004 winter wheat planted area, at 43.5 million acres, is 3 percent below last year, but up a bit from USDA's March estimate. Of this total, about 31 million acres are hard red winter wheat, 8.3 million acres soft red winter, and 4.2 million acres white winter wheat. Expected winter wheat area harvested is 34.8 million acres, down 5 percent below the 2003 total. The decline is expected across much of the country, especially in the northern Great Plains where growers were plagued by dry spring weather and freeze damage.

USDA estimates that spring wheat acreage will come to 13.7 million acres, down 1 percent from 2003. Of this, acreage planted to hard red spring wheat is estimated at 12.9 million acres. Farmers planted about 2.74 million acres to durum, down 6 percent from last year.

The decline in wheat acreage has been largely attributed to two factors. Last fall's dry weather discouraged some planting, according to analysts, and farmers found more profitability in feedgrain and oilseed production. Numbers from USDA seem to confirm those analyses, with corn acreage up 3 percent from both 2002 and 2003, and soybean acreage up 2 percent from last year. USDA points out that soybean acreage, if estimates are realized, will be the largest planted soybean area on record in the U.S., and a rebound from a three year decline in acreage.

U.S. wheat stocks in all positions, as of June 1, were up 11 percent from a year ago. The U.S. Department of Agriculture reported this week that a little over 359,000 metric tons (546 million bushels) of all wheat classes were stored in the U.S. The department also reported that March through May disappearance was 14 percent higher than the same period last year.

CANADIAN WHEAT ACREAGE DOWN

An official Canadian government agency, Statistics Canada, said this week that acreage planted to wheat dropped three percent from last year, 25.49 million acres this year compared to 26.27 million acres in 2003. Of that, spring wheat acreage remained relatively steady at 18.61 million acres, up 0.3 percent from last year's 18.56 million acres.

Canadian durum wheat area decreased 12 percent to 5.4 million acres. Stats Canada reports that this is below the 5-year average of 5.7 million acres for durum. The agency attributes the decrease to lower prices, "pressured down by large stock increases and decreased potential for export."