USDA confirms big drop in U.S. wheat acres

Amid a global supply glut and lagging prices, American farmers are intending a sharp reduction in new-crop wheat acres, Friday’s USDA prospective plantings report has confirmed.

American all wheat planted area for 2017 is estimated 46.1 million acres, down 8% from a year ago and potentially the lowest since records began in 1919.

However, the steepness of the reduction was not unexpected, with today’s estimate falling into line with the average pre-report trade guess. Kansas City and Chicago wheat were both trading about 8 cents higher after the report’s release this afternoon, while Minneapolis spring wheat futures were trading slightly lower.

Total U.S. winter wheat planted area for harvest this year is now estimated at 32.7 million acres, a drop of 9% from a year ago but actually 1% higher than what the USDA estimated in its January winter wheat seedings report.

Meanwhile, area planted to other spring wheat for 2017 is pegged at 11.3 million acres, down 3% from 2016, while intended durum area is down 17% at 2 million acres.

In Kansas, the main winter wheat production state, winter wheat area is down 1 million acres from last year to 7.5 million, leaving more ground open for corn and soybeans. Oklahoma winter wheat area is estimated at 4.5 million acres, a drop of 10% or 500,000 acres from a year earlier.

As for other spring wheat, the report said producers in the No. 1 state of North Dakota intend to plant 5.4 million acres, down 10% or 600,000 acres from the previous year and even further below the 6.7 million acres seeded in 2015. Minnesota spring wheat area is projected to fall a relatively modest 2% to 1.29 million acres, while South Dakota acres are expected down 13% to 940,000. On the other hand, growers in Montana indicated a 21% increase in spring wheat acres to 2.6 million.

Durum area in North Dakota this year is pegged at 1.15 million acres, a drop of 21% from 2016. In Montana, growers indicated a 12% decline in acres to 690,000.