The March 31 Prospective Planting report released by the USDA forecast acres seeded to all wheat at 44.655 million acres, down 1% from last year, slightly below pre-report estimates while the USDA notes this is the lowest area seeded to wheat since records began in 1919.
There was no surprise in the area planted to both winter wheat and durum, with Tuesday's estimates equal to the average of pre-report estimates prepared by Dow Jones.
One estimate that could be viewed as a surprise is the estimate for durum acres, with durum acres forecast down 4% to 1.29 million acres, which would reflect a fourth consecutive drop in seeded acres, as seen by the blue line on the attached chart. Looking back in USDA data, this would be the smallest area seeded since 1959-60. The Dow Jones average of pre-report estimates suggested a 1.5-million-acre estimate for today's report.
This may be partially tied to harvesting challenges faced with the late crop in 2019. The USDA's Crop Progress reports for 2019 show 24% of the North Dakota crop harvested by the last week of August, which compared to the 49% five-year average. Progress was reported at 78% complete by the last week of September and 94% complete as of late October.
At the same time, this estimate was based on surveys conducted in early March, while the world has changed substantially since then, with continuous reports surfacing on consumer panic buying of wheat products, including pasta, both in North America and Europe, which may alter plans. As well, Tuesday's Quarterly Stocks report shows durum stocks down 31% from March 1 2019 while farm stocks are down 42%, with total disappearance up 41% year-over-year. Movement is brisk.
Over the past five years, the official estimate from the USDA shows the actual area seeded to durum was higher than the Prospective Planting estimate in four of the five years (2015-2019). The five-year average increase from the March report to the final estimate is calculated at 10.4%, which indicates the likelihood that acres will be higher than the 1.29 ma forecast in March.
The brown line represents the trend in Statistics Canada's seeded acreage, with the 5.6 million acres shown for 2020 based on an unofficial AAFC forecast. It shows the potential for a 15% increase in acres seeded to durum in 2020.
An aggressive pace of movement is underway, with week 33 data showing exports up 937,500 mt or 42.5% from 2018-19 and is viewed as favorable, with support from the weak Canadian dollar that has recently reached its weakest trade against the USD in over four years. The most recent AAFC estimates point to ending stocks of 900,000 mt, down 50% from the previous crop year and the tightest stocks in 12 years. Through 33 weeks, the pace of movement would indicate that stocks could even be tighter than forecast as of July 31, with actual movement roughly 100,000 metric tons ahead of the pace needed to reach the current export forecast.
Canada's exports are supported by an increased flow to Italy this crop year, with the CGC reporting 568,800 mt shipped to Italy in the August-through-February period, the highest volume shipped over this period in four years.
Cliff Jamieson can be reached at email@example.com
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