Prices for wheat, the fourth-biggest U.S. crop, after hay, will drop 11 percent in the year starting June 1, the USDA said, even as production falls because of lingering drought in the western and southern Great Plains. Cotton prices will rise 2.8 percent while the area planted with the fiber falls to 10 million acres, the department said Friday.
Wheat acreage will rise 0.5 percent. Combined with corn and soybeans, plantings of the three crops may be the most since 1982, Glauber said.
"The record crop forecasts were sobering news and will cast a negative bias to the corn and soybean markets," Richard Feltes, the vice president of research at R.J. O'Brien & Associates in Chicago, said in an interview at the conference.
Farmers deciding what to plant are guided by concerns ranging from the prices they expect at harvest and the cost of fertilizer and other inputs to what the weather is likely to allow. Corn yields on average about four times as much grain per acre as wheat, for example, yet wheat needs much less water than corn.
"You're balancing soil conditions with what the likely market is going to be," Andy Novakovic, a professor of agricultural economics at Cornell University in Ithaca, New York, said in an interview. "In some places, the drought isn't something farmers have to worry about anymore," while in others, growers aren't even sure their seeds will germinate, he said.
Outside Mohall, N.D., Jeff Oberholtzer is planning to double the land he sows with corn this year, to about 600 acres, as seed varieties better adapted to northern conditions are boosting his yields. With an ethanol plant nearby that will buy the grain, it's a sensible crop to grow, even at a lower price, he said.