Winter wheat acreage in the U.S. is down 10 percent from last year and is the smallest area since 1909.
That information from the U.S. Department of Agriculture Jan. 12 supported wheat prices last week, but gains were limited as the department also raised its outlook for 2016-17 domestic and world wheat ending stocks.
The USDA pegged winter wheat seeding at 32.38 million acres, down 3.76 million acres.
Minneapolis hard red spring wheat futures, already supported by somewhat tight stocks of high-protein, quality wheat, rose to more than US$5.82 a bushel Jan. 13, the strongest level since July 2015.
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U.S. markets were closed Jan. 16 for Martin Luther King Day as this column was written, but there was potential for wheat futures to fall when trading resumed following the weekend storm that brought moisture to dry parts of the American southern Plains.
On the other hand, European traders were closely watching a cold snap spread west this week. The cold was already in Germany, but snow protected winter wheat. However, there were exposed fields in France that could be hurt if the temperature was cold enough.
Soybean prices also rallied on the USDA report as the department lowered its estimate of the 2016 American crop to 4.307 billion bu., down about 60 million bu.
It cut the forecast for year-end soy stocks by a similar amount to 420 million bu.
Further year-end stock cuts are possible once the USDA increases its export forecast to reflect the exceptionally strong movement so far this crop year.
Offsetting the price-positive effect of the stocks cut was a two million tonne increase in the forecast for Brazil’s soybean crop.
The department left its Argentina forecast steady at 57 million tonnes, even though that country’s farmers are struggling with excess rain.
More heavy rain this weekend added to the flooding problems, and more rain is expected Jan. 20-24.
The Rosario grains exchange said last week that 30 percent of the 48.4 million acres slated for soybeans in Argentina this season are under “red alert” conditions due to excess moisture, Reuters reported.
The USDA slightly trimmed its estimate of the U.S. corn harvest and the forecast for year-end stocks but not enough to lift futures significantly for that crop.
