Brazilian wheat areas to reach record high in 2014/15

Date:05-16-2014

Strengthening wheat prices in Brazil are encouraging farmers to plant the most winter wheat in ten years. The total 2014 wheat acreage in Brazil is estimated at 2.7 million hectares, which if achieved, would be the most since the 2003/04 growing season when they also planted 2.7 million hectares. It is estimated that farmers in Parana will plant 1.3 million hectares with 1.2 million in Rio Grande do Sul, 200,000 in Santa Catarina with small amounts in other states.

The anticipated wheat acreage in the state of Parana was recently increased by the Secretary of Agriculture in the state. It is now estimated that farmers in the state will plant 1,300,000 hectares of wheat, which is 100,000 more than their estimate in March. The increased acreage is coming at the expense of safrinha corn acreage in northern Parana. During the last two growing season, farmers in the state planted less than one million hectares of wheat as they opted for more safrinha corn instead.

The 2014 wheat production in the state is now estimated at 3.8 million tons, which would be nearly double last year's production. The 2013 wheat crop in Parana was negatively impacted by a series of frosts that occurred between May and July. Approximately 30% of the 2014 wheat crop has been planted in Parana and planting should be complete by about the end of May. The wheat crop in Parana will be harvested generally during September and October.

Rio Grande do Sul is the other major wheat producing state where 1.2 million hectares are expected to be planted. Farmers in the state will plant their wheat in May and June and harvest it in October and November. In both states, farmers will plant soybeans after the wheat is harvested.

Domestic wheat prices declined in Parana during the first few months of 2014, but they have since recuperated. During the month of April, the wheat price in Parana averaged R$ 42 a sack of 60 kilograms (approximately US$ 8.65 a bushel), which is 10% more than in April of 2013. The Brazilian government has also increased the guaranteed minimum price for wheat by 5% to R$ 33.45 per sack (approximately US$ 6.90 a bushel).

Conab is estimating that Brazil will produce 6.7 million tons of wheat in 2014, which would represent an increase of 22% compared to the 5.5 million tons produced in 2013. If achieved, it would be a record large wheat crop in Brazil. This would still be far short of the domestic demand estimated at nearly 12 million tons. Depending on the yields of the 2014 crop, Brazil would still need to import between 5-6 million tons of wheat, which would be about a million tons less than the 6.7 million tons imported during the last growing season.