Northern Hemisphere is close to finishing its planting campaign for winter wheat harvest 2024. The IGC in its November 2023 report tentatively pegged the global wheat harvested area in 2024/25 MY at 222.2 million hectares, down about 1% y/y, that is partially linked to weaker wheat prices on the world market. Thus, in Ukraine, the winter wheat planted area is about to drop by 2% y/y. The IGC expects the total wheat area in Russia to decrease by 3% y/y. Also, recent excessive rains in the key EU’s producing countries – France, Germany – implied for smaller planted area in the bloc. In India, one of the biggest wheat producers in the world, the prospects are unclear, with attractive prices for farmers on the one hand, and dry soils on the other. In the USA, the all-wheat planted area is also seen lower y/y. However, the IGC sees the growth of the US harvested area amid hopes for better weather compared to very dry conditions in the previous season. Let’s have the first look at the prospects of wheat production for the next season.
Ukraine may face smaller wheat crop 2024 amid reduced winter wheat acreage
The planting campaign of winter wheat, which typically accounts for about 95% of Ukraine’s overall wheat output, is coming to its end. As of 28 November 2023, Ukrainian farmers planted winter wheat on 4.16 million hectares or 95.4% of the expected area. The Ukrainian AgMin pegged the total planted area under winter wheat at 4.36 million hectares. As of the reporting date, ten regions of the country have already completed the winter wheat sowing.
For the 2023 harvest, Ukrainian farmers planted 4.46 million hectares of winter wheat. Thus, under the current forecast, Ukraine will reduce the planted area under winter wheat by 2% y/y, mainly amid less price attractiveness for farmers.
The Ukrainian state weather forecaster Ukrhydrometcenter said that Ukrainian winter crops mostly have entered the winter season in predominantly good condition. During the second ten-day period of November, the conditions for the completion of vegetation of winter crops were mainly satisfactory in Ukraine. Ukrhydrometcenter said that the condition of crops ahead of the wintering was mostly good. In southern regions, where there had been no efficient rains for more than 2 months, generous precipitations were observed that significantly improved the soil moisture reserves and stopped the soil drought. The experts informed that the active vegetation of crops stopped, as the temperatures decreased sizably across almost the entire territory of Ukraine.
We should note that since late November Ukraine has been facing a large amount of precipitations. The forecast for the next two weeks shows that the country is going to receive the amount of precipitations again sizably above the norm. The temperatures are going to be lower than the average across many regions of the country.
The first deputy agriculture minister of Ukraine Taras Vysotskiy announced the first forecast of winter wheat production in 2024 at 18-20 MMT. Basing on the fact, that winter wheat accounts for about 95% of the total wheat harvest, the overall wheat production in Ukraine in 2024 may be tentatively placed at 19-21 MMT. It is down between 7% and 16% from 22.5 MMT estimated by the USDA for 2023 crop.
As to the spring planting campaign, it is too early to say anything. But, there are some factors that can negatively affect farmers’ planting intentions. The key one is the possibility to export Ukrainian grain. Currently, all hopes are for the resumption of more or less stable sea exports, while land export is facing new challenges. Polish farmers are blocking border checkpoints, virtually blocking the entire export from Ukraine. In 2022/23 MY, almost 1.3 MMT of wheat passed through the Polish border, mostly for re-export to other countries. In Jul-Oct 2023/24 MY, 287 KMT of wheat was moved via the Polish border. Another problem is plans by Ukraine’s national railways Ukrzaliznytsia to raise transport tariffs by 20% from Jan 2024. The UGA said the higher tariffs would lead to increased losses for farmers and provoke a new reduction in planted areas in 2024.
Russia to harvest another bumper wheat crop in 2024/25 MY
The planting campaign of winter wheat is coming to its end in Russia. As of 20 November, 16.84 million hectares were planted vs 15.58 million hectares for the same date in 2022. Agritel expects the area under winter wheat in Russia to rise y/y. However, they said that some farmers may switch to other crops depending on export taxes and profit margins. The IGC expects the total wheat area in Russia to decrease by 3% y/y to 28.2 million hectares amid smaller farmers’ returns.
By mid-November, timely beneficial rains arrived in the key wheat-producing regions across the Russian South, which was previously dry. However, less amount of precipitation is expected in the coming two weeks, with temperatures to be higher than the average.
In its first forecast of the Russian wheat crop 2024/25, Agritel pegged the production at bumper 90 MMT vs 86.9 MMT in 2023 and 96.5 MMT in 2022. The forecast includes 65.8 MMT of winter wheat and 24.2 MMT of spring wheat. Currently, they expect the yield to be broadly in line with the 2023 level. Russian consulting agency SovEcon initially expects the country’s 2024/25 wheat production at 89.8 MMT, down from their 2023 estimation at 91.5 MMT. Agritel added that the expected harvest combined with stocks would keep the Russian wheat supply above 100 MMT in 2024/25 MY.
EU’s soft wheat area for harvest-2024 to fall, yield may be hurt
In France, a key EU’s wheat producer, planting of soft winter wheat came to a near standstill by late November, as abundant rains were preventing farmers from fast progress. Generally, across western and parts of northern Europe, excessive rainfall since mid-October has delayed or prevented the conclusion of the sowing campaign, MARS said in its November report. In turn, dry conditions in south-east Europe have led to poor sprouting.
As of 20 November, French farmers planted 74% of the expected soft wheat area, FranceAgriMer reported. By the same date a year ago, the field works were virtually completed with the planting campaign done at 98%. Moreover, the excessive precipitations are negative for wheat conditions. As of the reporting date, 83% of soft wheat was rated as good/excellent, down from 86% week ago and 91% two weeks earlier. The current crop condition is 8% below the year-ago level.
Crop Institute Arvalis said that above-normal rains across most parts of France in November may force farmers to re-plant some fields with spring crops.
Consultancy Strategie Grains said that the excessive rains in France and to a lesser extent in Germany will result in a smaller overall EU’s soft wheat area for the 2024 harvest. They put their expectation for the EU’s soft wheat area at 0.9% below 2023. The IGC tentatively pegged the EU’s harvested area at 23.7 MLN HA, down 1% y/y.
MARS said that the persistent rain in western Europe if continuing, would have a negative impact on the total sown area. Although, the forecast for the coming two weeks is for a smaller amount of precipitation in France. In Germany, the precipitations are lower than the average.
MARS added that sprouting and initial development of winter cereals would increasingly depend on mild conditions in December. Some farmers may decide to switch to spring wheat early next year.
US winter wheat in better condition than in last year
By late November, the USA has completed its winter wheat planting campaign. The field works were moving quite close to the average pace.
As of 26 November, the condition of US winter wheat is much better than the last year, with 50% of the crop rated as good/excellent vs 34% in 2022. It also surpasses 44% in 2021.
The IGC pointed that the drought conditions eased in the first half of November, however, dry soil still remain a concern in some states. The weather forecast for the next two weeks is for limited amount of precipitations across most of the country, with temperatures close or above the average.
The IGC sees the all-wheat harvested area in the USA rising by 5% y/y, despite the cut to the planted area by 3% y/y. The experts expect for reduced abandonment compared to the poor picture of the previous year. The development of the weather conditions is to be closely monitor in the USA, as the rains are highly required.
In India, dry soil may prevent area extension spurred by price rally
In India, planting of wheat is moving slower that the year ago due to delayed rice and sugarcane harvests. As of 17 November, farmers planted 8.6 MLN HA with wheat, down 5.5% vs the last year’s pace, according to the official data.
The IGC expects the area to increase slightly y/y due to high wheat prices on the domestic market of India. However, there were concerns that the dry weather and low soil moisture reserves may force farmers in some areas to switch to less water-intensive crops. In the state of Madhya Pradesh, which is the second biggest wheat producer in the country, the farmers are switching to other crops and wheat area may fall by 10% y/y. In turn, some other key growing states, like Haryana, Punjab and Uttar Pradesh have reliable irrigation that will help them to maintain wheat yield.
However, the forecast for the coming two weeks is for abundant rains across the whole territory of India that may bring relief for wheat planting.
IGC sees 5% decrease of wheat acreage in Canada in 2024
According to Syngenta, the drop in winter wheat acres in Canada is not a surprise, given poor fall planting conditions and much weaker prices compared to the previous fall. Agricorp noted, for example, that with planting for the 2024 crop now wrapped up, the provincial crop insurer pegged the number of insured winter wheat acres in Ontario province at end of November 2023 at 697,000 acres vs. 894,900 acres last year. That does not tell the whole story of course, because not all wheat acres in the province are insured. If accurate, that would represent a fall of 21.8% from wheat was planted in the fall of 2022. In fact, it could be the lowest Ontario winter wheat planted area since the 2015 crop, when farmers got just 700,000 acres into the ground. Herewith, more rains in the first half of December sounds can improve the situation.