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WASHINGTON, DC, US — Tight supplies of grain and oilseeds have propelled prices in recent months to multi-year highs for ingredients like flour and soybean oil. Data issued in mid-January by the US Department of Agriculture provided some relief, but a prominent commodity analyst cautioned it would be premature to declare an end to the commodity bull market.

The USDA’s National Agricultural Statistics Service on Jan. 12 estimated area planted to winter wheat for harvest in 2022 at 34.397 million acres, up 749,000 acres, or 2.2%, from 33.648 million acres in 2021 and compared with 30.45 million acres in 2020.

The estimate was in line with trade estimates and would be the largest winter wheat area in six years, or since 36.149 million acres were planted for harvest in 2016.

Also encouraging for ingredient buyers hoping for lower prices, the USDA raised its forecast for the 2022 wheat carryover to 628 million bushels, up from 598 million bushels as the December forecast.

The forecast put wheat futures on the defensive, with most Chicago and Kansas City contracts as of Jan. 13 down 10¢ to 15¢ a bushel for the week and Minneapolis contracts down as much as 25¢.

Steve Freed, a vice president at ADM Investor Services, Chicago, Illinois, US, said the reports likely will set a softer tone for the next few weeks, until further data are forthcoming. Still, he cautioned that the reports did not miraculously transform the tight picture in global grain and oilseed markets.

In the case of wheat, while the winter wheat acreage would be the largest in six years, it would not be a large planted area by historical measures. To the contrary, it would be the tenth smallest since the USDA began gathering data more than 100 years ago, larger only than the plantings for crops in 2017 to 2021 and a few years in the early 20th century — 1909, 1910, 1911 and 1913.

Similarly, while the January forecast for the wheat carryover was up from December, at 628 million bushels, it would still be far tighter than the last several years — 845 million bushels in 2021, 1,028 million in 2020 and 1.08 billion in 2019.

Meanwhile, extreme dry weather over the fall and early winter has left the dormant wheat crop in vulnerable condition. Spring weather, rather than what happens during the winter, typically is most important in determining the fate of a winter wheat crop. On this subject, Freed expressed concern as well, citing meteorologist Drew Lerner who “basically still feels as though it won’t rain through the end of April.” He added, “Eventually, that would be bullish wheat.”

In the crop forecast, the USDA said plantings increased the most in the soft red winter states and very little in hard red winter growing areas.

Of the planted area total, 23.8 million acres were estimated to have been planted to hard red winter wheat, up 1% from 23.5 million acres in 2021.

“Planted acreage is up from last year across most of the growing region,” NASS said. “The largest increases in planted acreage are estimated in Kansas and Texas, while the largest decreases are estimated in Colorado and New Mexico.”

The USDA estimated the 2022 soft red wheat planted area at 7.07 million acres, 6% larger than the 2021 planted area at 6.65 million acres.

“Compared with last year, the largest acreage increases are expected in Missouri, North Carolina, and Ohio, while the largest acreage decreases are expected in Maryland and Michigan,” NASS explained.

The estimated white winter area in 2022 was 3.56 million acres, up 2% from 2021.

“Planting in Idaho and Washington was ahead of the five-year average throughout most of the planting process. Seeding was virtually complete in the region by early November,” NASS said.

NASS estimated durum seedings in Arizona and California for harvest this year at a combined 90,000 acres, up 15% from 2021 and up 20% from 2020.

Source: World Grain