(Updates prices in fifth paragraph)
Jan. 28 (Bloomberg) -- Wheat sowing in Canada, set to be the world’s third-largest shipper, will probably expand as much as 10 percent this year spurred by a rally in prices, according to the nation’s wheat board.
Area may rise 5 percent to 10 percent from 9.63 million hectares (23.8 million acres) last year, as growers switch to wheat from less profitable crops including oilseeds and rye, said Bruce Burnett, a weather and crop surveillance specialist at the Canadian Wheat Board, which monopolized the country’s exports for 70 years until a new law was enforced in 2012.
Rising production in Canada may help ease supply concerns after global inventories declined for a third straight year as dry weather from Australia to Russia shriveled crops. A persistent drought in the U.S. threatens to curb the 2013-2014 harvest in the world’s largest shipper, with the winter-crop already in its worst condition when it became dormant in November since at least 1985. Futures soared 19 percent last year, reaching a four-year high of $9.4725 a bushel in July.
“Farmers are optimistic about next year,” said Burnett, who has been tracking weather conditions and crop outlook in Canada for 22 years, referring to the 2013-2014 marketing year beginning Aug. 1. “Prospects for prices look reasonably good for farmers,” he said in an interview from Winnipeg Jan. 25.
Wheat for March delivery gained 0.7 percent to $7.8225 a bushel on the Chicago Board of Trade at 4:35 p.m. Singapore time. That takes the gain for the most-active contract in the past 12 months to 21 percent.
Locking in Prices
“A lot of the farmers are going to lock in those prices for a portion of their crop,” Blair Rutter, an executive director of Western Canadian Wheat Growers Association, said by phone from Winnipeg on Jan. 25. “It wouldn’t surprise me to see a 10 percent increase in spring-wheat planting.”
Last year’s spring-wheat planting reached 6.85 million hectares, representing 71 percent of total areas seeded to wheat, including the winter-crop and durum variety, Statistics Canada data showed. Harvests of all varieties reached 27.2 million tons in the 2012-2013 marketing year, the Ottawa-based agency said.
The Prairies will probably have near to above normal precipitation through the rest of the winter-season, boosting soil moisture for the spring planting season, Bryce Anderson, an agricultural meteorologist at DTN, said in an e-mail on Jan. 25 from Omaha, Nebraska.
Farmers seeded 902,000 hectares with winter-wheat last fall, for harvest in the year beginning Aug. 1, according to Agriculture and Agri-Food Canada. The harvest may rise to 3.79 million tons from 3.73 million tons in 2012-2013 marketing year, Patrick Girard, media relations officer at the agriculture ministry, said in an e-mail, citing a government forecast.
Canada was the largest exporter after the U.S. until 2008, according to World Trade Organization data based on calendar year. The country may sell 18.5 million tons in the global trade year ending June 30, making it the largest shipper after the U.S. and Australia, U.S. Department of Agriculture data showed.
--Editors: Thomas Kutty Abraham, Ovais Subhani