Global demand for grain increases US planted area

US plantings for grain and oilseeds are forecast to increase as a result of high global prices.

The planted wheat area in the US is forecast to reach 19.4m hectares for 2022-23 – an increase of more than 500,000ha on the previous year, according to the US Department of Agriculture (USDA).

The US soya bean planted area is forecast at 35.6m hectares – an annual increase of about 300,000ha – while the planted area for maize is expected to decline by 560,000ha to about 37.2m hectares.

At the USDA’s 2022 agricultural economic and foreign trade outlook on Thursday (24 February), chief economist Seth Meyer said the department was anticipating increases for both winter and spring wheat, with larger plantings expected in Kansas, Texas, Nebraska, and South Dakota.

However, severe droughts in the Midwest and on the west coast could affect the winter wheat harvest.

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Mr Meyer said: “Wheat prices are projected to be modestly lower for 2022-23 on higher stocks, but are above their long-term averages.”

The USDA expects maize, soya bean and wheat prices received by producers to all decline below last year’s historically high levels and suggests forward-pricing opportunities for producers are currently very attractive, with prices at harvest expected to be lower, assuming normal weather conditions.

Soya bean

Soya bean plantings in the US have also been driven by high prices in the past year.

Mr Meyer said that the impact of droughts on soya bean crops in South America and reduced global stocks at the start of the 2022-23 marketing year means soya bean prices are projected to remain elevated.

“Soya bean future crush margin has been historically high. That is to say, the value in buying the bean, crushing it for meal and oil and selling the meal and oil has been very high, and demand for those co-products in soya bean crush has been substantial.

“And really, it has been a shift in oil demand that is the real driver, bringing on an increased share of the bean,” said Mr Meyer.

“Oil is carrying more of the weight of the value of the soya beans and that’s pulling soya beans higher.”