Brazilian farmers have just started to plant their wheat crop, hoping there will be no repeat of last year's heavy frost and rain damage.
A mixture of strong local wheat prices and weak prices for corn, the main winter crop alternative, will lead to a jump in planting.
The southern state of Parana, Brazil's biggest wheat producer, will plant an extra 23% of wheat in 2014, taking area to 3.0 million acres, according to the state agricultural secretariat.
Meanwhile, neighboring Rio Grande do Sul, the No. 2 state, will plant an extra 10%, taking area to 2.7 million acres, according to state estimates.
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Together, these two states account for approximately 90% of all wheat planting.
In 2013, Brazil produced just 4.4 million metric tons. The Agriculture Ministry estimates that number will jump 26% to 5.5 mmt in the 2014 season, which has just got underway.
Considering that demand will be around 11.3 mmt, imports will total 6.5 mmt, says the Brazilian government. That's down from 7.0 mmt last year.
Argentina, Brazil's traditional wheat supplier, will likely increase planted area by 10% this year.
Brazil is currently importing from Argentina but the neighbor has become such an irregular supplier of late that it is likely Brazil will import a lot of North American wheat once again this year.
In 2013, Brazil imported approximately 3.5 mmt of U.S. wheat compared with 2.5 mmt of Argentine wheat.
Wheat millers are already lobbying to have the 10% import tariff on North American wheat suspended again in 2014.
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