Wheat Production and Harvest Archives

Volatile Wheat Markets Highlight Unexpected Opportunities

In late May, U.S. Wheat Associates (USW) reported on bullish wheat market sentiment, driven by adverse weather and changing supply and demand conditions. Since then, the volatility that has remained a constant in wheat markets for more than two years returned. From May 24 to June 21, CBOT, KCBOT, and MGEX wheat futures dropped 69 cents, 55 cents, and 58 cents, respectively.

Until global supply and demand is more defined, markets will remain sensitive to changes in weather, perceived consumption, and supply shifting events. However, the recent volatility may help illuminate unexpected buying opportunities for U.S. wheat.

Line chart shows volatility in the wheat market from March 2022 through May 2024

Markets have been volatile over the last few months. From May 24 to June 21, CBOT, KCBOT, and MGEX wheat futures dropped 69 cents, 55 cents, and 58 cents, respectively. Source: U.S. Wheat Associates Price Report.

A Series of Trend Reversals

In March 2024, markets hit multi-year lows as ample wheat stocks from Russia and record Black Sea exports weighed on global wheat prices. Starting in April, the market’s “weather eye” saw drought conditions and severe frost damage in central and southern Russia prompting a reversal and prices rallied back to 2023 levels. Confirmed by the June World Agricultural Supply and Demand Estimates (WASDE), the Russia production estimates decreased by 8.5 MMT on the year to 83.0 MMT, the lowest level since 2021/22. Likewise, persistent wet, cool weather and flooding decreased the European Union (EU) planted area and diminished French and German yield potential, resulting in a yearly decrease of 3.7 MMT to 130.5 MMT.

This world map from USDA shows changes in wheat production contributing to volatility in world markets.

The June WASDE decreased Russia production estimates by 5.0 MMT to 83.0 MMT, due to drought conditions and severe frost damage. Like wise, persistent wet, cool weather and flooding in the EU prompted USDA to decrease production by 1.5 MMT to 130.5 MMT. Source: USDA Wheat Outlook.

Adding further strain on the market, rumors began circulating that India may begin importing wheat, with stocks sitting at 7.5 MMT, the lowest in 16 years. In response to supply strains, wheat futures prices climbed throughout April and May, touching levels not seen since Fall 2023 and adding support to world cash values.

Meanwhile, on June 6, major world importer Türkiye announced a ban on wheat imports from June 21 through October to control domestic prices. Adding validity to the claims, the June WASDE reduced the Turkish import forecast from 10.5 MMT to 9.5 MMT. The announcement suggested weakened demand prospects and sent markets lower. Contributing to the new narrative, private analysts also suggested the impacts on Russian yields were not as severe as predicted. Furthermore, the U.S. production outlook now seems more favorable and harvest progress continues rapidly. As of June 23, 40% of the winter wheat crop is in the bin, while conditions in the remaining acres sit at 52%, up from 40% last year. Similarly, 71% of spring wheat rates good or excellent, a 21-point jump from the previous year.

The combined impacts of Türkiye, alleged improvements to Russia production, and the U.S. harvest has depressed prices, bringing them back in line with, or in the case of HRS slightly below, their position in March 2024.

Eyes Out for Opportunity

Despite the recent volatility, the spread between competing origins has narrowed over the last few weeks. According to AgriCensus price data, as of June 21, Russian, French, Romanian, and Soft Red Winter hovered in a narrow range between $230-$235/MT, a considerable decrease from the $17/MT spread between Russian wheat and the next cheapest origin noted in March. Likewise, Gulf HRW prices trend lower, with the June 21 U.S. Wheat Associates Price Report putting Gulf HRW with 11.5% protein at $243/MT, in line with German and Polish origins and only $12/MT above Russian prices, a much closer spread compared to a $67/MT difference observed in March 2024.

As U.S. wheat prices align more closely with other export prices, it presents a chance for international buyers to take advantage of the recent price trends. Supported by exceptional quality, a dependable supply chain, and unsurpassed customer service from USW colleagues, U.S. wheat offers an exceptional value.

This line chart shows the relationships and volatility in the global wheat market.

The June 21 U.S. Wheat Associates Price Report put Gulf HRW with 11.5% protein at $243/MT, in line with German and Polish origins and only $12/MT above Russian prices, a much closer spread compared to a $67/MT difference observed in March 2024. Source: AgriCensus Price Data and the U.S. Wheat Associates Price Report.

June 26, 2024/by Steve Mercer

Sustainability, Wheat Production and Harvest

Where Can I Learn More About Sustainable Wheat Production?

Here in the United States, the topic of sustainable agriculture is getting a lot of attention. U.S. Wheat Associates (USW) believes people everywhere want to know where their food comes from and how it is produced. The following facts and resources will help the world’s wheat buyers learn more about sustainable wheat production in the United States.

Stories of Stewardship

USW in 2024 has shared some of the impressive stories of stewardship in wheat production taking place across the country. In a new effort we call “Stories of Stewardship,” USW gathers resources the world’s wheat buyers, flour millers, bakers, and wheat food processors need to better understand how U.S. farmers produce more and better-quality wheat while using methods that are better for the planet we all share. This includes a video series that feature 5 farmers who tell their own stories of how they are managing their crop and land for our future.

U.S. Sustainability Alliance

To help tell the story of sustainable wheat production to the world, USW is a member of the U.S. Sustainability Alliance. That is a group of American farmers, fishery managers and foresters who want to tell the world “how we grow.” The group offers many resources for learning more about responsible food production, including a series of articles about how individual farmers approach sustainable production, including one about Jennie Schmidt, a Maryland farmer who recently traveled to Asia with USW.

A beneficial fact sheet titled “U.S. Wheat – A Global Leader in Sustainability” is also available from U.S. Sustainability Alliance and on the USW website.

Field to Market

Field to Market is an alliance of diverse member organizations formed to help “unite the supply chain to deliver sustainable outcomes for agriculture.” In December 2021, the National Association of Wheat Growers (NAWG) shared about sustainable wheat production from Field to Market’s latest “National Indicators Report.” That report provides an assessment of “where U.S. agriculture has made progress in driving improved environmental outcomes.”

NAWG noted the report shows wheat production saw improvement in its sustainability efforts in almost every category of land use, soil conservation, water and energy use. Review the Wheat section of the Field to Market report online here and the entire report here.

Farm Bureau

The American Farm Bureau Federation (AFBF) is a nationwide advocacy organization for U.S. farmers, including many wheat farmers and livestock producers. The organization has an interesting resource on “Sustainability in Agriculture.” AFBF co-founded the Food and Agriculture Climate Alliance and, to showcase the progress U.S. producers have made in achieving sustainability goals, also co-founded Farmers for a Sustainable Future.

AFBF’s President Zippy Duvall in 2022 wrote an important column pointing out some key facts about U.S. agriculture that may not be well-known. For example, he noted that “American agriculture makes up just 10% of greenhouse gas emissions, much lower than transportation, electricity generation and industry.” In addition, he said more than half the U.S. wheat corn, cotton and soybeans were planted using no-till or low-till methods.

USDA

The U.S. Department of Agriculture has important programs that benefit U.S. farmers and the environment. One example is the Conservation Reserve Program, which has a direct, positive impact on carbon sequestration. There are 140 million acres (56.7 million hectares) of privately owned land reserved from cultivation. In other words, that amount of land is more than the states of New York and California combined.

On September 2022, Secretary Vilsack announced USDA would be investing up to $2.8 billion in 70 selected projects under the first pool of the Partnerships for Climate-Smart Commodities funding opportunity. On December 12, 2022, he announced $325 million would be invested in an additional 71 projects under the second funding pool. “Partnerships for Climate-Smart Commodities” supports farmers, ranchers, and forest landowners create market opportunities for U.S. agricultural and forestry products that use climate-smart practices. Some of these practices include cost-effective ways to measure and verify greenhouse gas benefits. Read more about this initiative here.

June 24, 2024/by Steve Mercer

Wheat Production and Harvest, Wheat Quality

2024 Wheat Tour Sees Higher Yield Potential Amid Variable Conditions

Even with variable crop conditions, the 2024 Wheat Quality Council (WQC) Hard Winter Wheat Tour has estimated a total weighted average yield of 46.5 bushels per acre (bu/a) across its annual tour routes in Kansas with swings into southern Nebraska and northern Oklahoma. The tour yield estimate is up significantly from its 2023 estimate of 30.0 bu/a.

Valuable Insight

Sixty-nine participants this year from government, universities, media, grain trade, millers, bakers, and farms stopped at 449 fields to evaluate yield potential and crop conditions.

Photo shows Peter Laudeman in a wheat field with a yardstick during the 2024 Wheat Tour.

USW Director of Trade Policy Peter Laudeman.

“The tour has provided valuable insight into this year’s crop,” said Peter Laudeman, Director of Trade Policy, U.S. Wheat Associates (USW) who participated in the tour along with his colleague Luke Muller, Assistant Director, West Coast Office. “Overall, the crop is looking stronger than the last two, uncharacteristically low production years, but it remains to be seen how far above that bar we will get when harvest is complete.”

Largely because of continuing short rainfall, the crop is developing at a faster pace than normal. Experienced crop observers and farmers participating in the wheat tour believe harvest in south-central Kansas could start in early June. That is up to 10 days ahead of average.

“The tour scouts reported wide variability depending on planting dates, moisture, and impact from pests and disease,” Laudeman said, illustrated by the two wheat fields seen at the top of this page. “Stripe rust was notably present across a large swath of northern Kansas and southern Nebraska counties where there is still a window for applying disease control products to limit yield loss. Wheat Streak Mosaic, a viral disease, is another concern to assess. We also saw freeze damage in many fields in southwest and south-central Kansas on the second day.”

Derek Sawyer, who farms near McPherson in east-central Kansas, told Kansas Wheat that although there have been multiple stresses across the state, “we are still looking at a decent crop. That is a testament to the wheat breeders and researchers and the work they have done.”

In 2024, farmers in the wheat tour area will harvest more fields compared to high abandonment in the severe 2023 drought.

“Last year, we only harvested about 200 of the 1,400 acres that we had planted, and those did about 20 bushels an acre,” Hoisington, Kan., farmer Dean Stoskopf told DTN/Progressive Farmer. “So far this year, we’ve still got all our wheat. Some is decent. Some is so-so.”

Tour organizer and WQC Executive Director Dave Green told DTN/Progressive Farmer that through the second day of the tour the crop looked better than drought conditions would have indicated.

“It seemed like, ‘Yes, we certainly need rain in a lot of areas,’ but I was surprised how not every field was drought-stressed and really looking like it’s in trouble,” Green said.

“I would really emphasize how crucial the spotty rain showers the past couple weeks were for those farms fortunate to receive them,” Luke Muller said. “The heat units and moisture in the next month will really determine how the crop gets across the finish line.”

Even with the tour’s higher-than-expected estimated yield estimate, there was muted pressure in the U.S. futures markets. July hard red winter wheat futures closed on May 16 at $6.73 per bushel, down only 1.6 cents from May 15. Significant cuts in Russia’s wheat yield estimates, including by SovEcon likely made the difference. The analyst this month lowered its 2024 Russian wheat production forecast by 7.2 million metric tons (MMT) to 85.7 MMT due to dry conditions and freeze damage in Central and Southern Russia.

The Wheat Quality Council each year emphasizes that the scouts’ estimated yield potential is only a snapshot of the crop during the week of the tour. The primary goals of the wheat tour are to make connections within the wheat industry, allow participants to meet wheat farmers, observe the growing crop, and to highlight the agriculture industry.

May 16, 2024/by Steve Mercer

Market and Crop Analysis, Tyllor Ledford, Wheat Production and Harvest

Articles of Interest – The Latest News About the U.S. Wheat Crop

Every weekday, U.S. Wheat Associates (USW) searches U.S. and global media for news about the U.S. wheat crop and the world wheat market. USW shares the news of the day as a service to our domestic stakeholders. The articles of interest on Monday, April 29, summarized below also have value for our overseas customers.

Wheat Market Rally

A market analysis article presented April 26 on “Farm Journal AgWeb” reached out to Allison Thompson of The Money Farm to describe a 7-day rally in U.S. wheat futures prices while corn and soybean futures declined. Thompson said concerns about dry conditions in the Central and Southern Plains hard red winter (HRW) region as well as southern Russia and western Canada sparked commercial investors to cover long-held short futures positions.

In the April 26 USW Price Report, Market Analyst Tyllor Ledford related news from traders that the futures rally did prompt farmers to sell old-crop wheat. Storms from April 26 to 28 sadly included a deadly, destructive tornado outbreak but also significant rain for some HRW and SRW production regions. So, early on April 29, HRW and soft red winter (SRW) futures were down. The precipitation missed much of western and south-central Kansas, eastern Colorado, and western Nebraska, however.

Image from USW Price Report page describes the latest information on US wheat export market and prices.

The April 26, 2024, USW Price Report noted that farmers increased sales of old crop HRW and HRS wheat during a recent rally in U.S. wheat futures prices.

Spring Wheat

Also on April 26, North Dakota Wheat Commission Director of Policy and Marketing Jim Peterson told “Farm & Ranch Guide” that there are both positive and negative price influences for U.S. hard red spring (HRS) wheat.

Jim Peterson

“On the positive note, it looks like an earlier planting season than a lot of other areas relative to the last few years, so that’s typically yield positive,” he explained. “The reason we’re seeing earlier planting is a lot of areas are abnormally dry to critically dry. If we don’t get a big shift in weather patterns here, we could see some early season moisture stress on the spring wheat region. Then we’ll see what happens with acres. Right now, the forecast is for unchanged total acres nationally, maybe up slightly,” he added.

Despite strong Canadian competition, Peterson said some demand fundamentals support the U.S. spring wheat market. Commercial sales of HRS as of April 25 were 13% ahead of a year ago at 6.40 million metric tons (MMT) and more than USDA’s projections.

Potential Wheat Supply Chain Disruption

Along with the farm and grain handling industries in the Pacific Northwest export system, USW is closely watching the political fight about the potential breaching of four dams on the Lower Snake River. An agricultural media company in the region with a website called AgProud.com published an interview about the debate with Scott Corbitt, General Manager of the Post of Lewiston in Idaho. In the interview, Corbitt describes the value of the port to the region and the overseas customers it helps serve.

U.S. grain handlers purchase wheat from farmers and transport approximately 24 million bushels (0.65 MMT) of wheat by barge through the Port of Lewiston every year, he said, and the companies barge 10% of total U.S. wheat exports through the Colombia Snake River System. Wheat exported from Idaho alone exceeds $300 million annually, Corbitt told AgProud.com. He added that breaching the Lower Snake River dams would result in a huge economic hit for the region disrupt the efficient flow of U.S. soft white (SW), HRS and HRW wheat to export elevators downstream in the Portland area.

Ice Harbor Dam on the Lower Snake River System in Washington state.

Read more information on the threat to barging on the Colombia Snake River System online here.

Eye on the Crop

“Capital Press” reporter Matthew Weaver recently wrote about how researchers at Washington State University have installed a wheat field camera at the university’s dryland research station in eastern Washington state. The still images taken several times a day of a spring SW wheat field can be viewed online at the research station website and on its YouTube channel.

A spokesperson for the station said the camera is a way for overseas and domestic wheat buyers, as well as non-farmers, to see how the crop progresses and to get more information about sustainable wheat production. The station plans to add short videos about the spring SW wheat crop to the service throughout the growing season and harvest.

The Washington Grain Commission, a long-time USW member organization co-sponsors the “WSU Field Cam.”

April 29, 2024/by Steve Mercer

Hard Red Winter, Kansas Wheat, Market and Crop Analysis, Wheat Production and Harvest

A Better Start for U.S. Hard Red Winter Wheat Conditions

With U.S. hard red winter (HRW) and hard white (HW) wheat moving into its crucial vegetative state, U.S. Wheat Associates (USW) and its state wheat commission member organizations have started weekly conference calls to share wheat condition reports. Overall, wheat in Central and Southern Plains entered 2024 in better condition than compared to the prior three years. Although recent weather has turned warm, windy, and dry, industry participants remain optimistic for the 2024 crop.

The most recent 2024 USDA Crop Progress report rated 56% of the winter wheat crop in good to excellent condition, up significantly from 27% last year. As of April 8, 6% of winter wheat is headed in the Southern Plains. USDA reported as of April 9, an estimated 18% of all U.S. winter wheat production is within an area experiencing drought.

Latest HRW Wheat Conditions

As usual, Texas leads the way in crop progress with 27% of its HRW and soft red winter wheat headed. At 44% good to excellent, conditions remain encouraging.

In Central Oklahoma, wheat progress continued to benefit from recent rains with 55% at the jointing stage. Good to excellent wheat condition in the state was 68% as of April 7. USW Chair Michael Peters farms northwest of Oklahoma City and reported this week that the condition of his HRW wheat varies from excellent to “just okay.”

Conditions in Kansas are also variable with 49% rated good to excellent. Jason Ochs farms in far western Kansas and recently told Kansas Wheat that it was a nice change to get a good stand right from the start last fall. Yet he also said his topsoil is dry.

“We missed the last three of four moisture chances, so optimism is going down a little bit,” Ochs said. “As of now, it looks like we are going to raise above-average yields. I don’t know how you cannot be a little excited about that.”

Drought has eased for the 2024 U.S. winter wheat crop. On April 18, 2023, 50% of winter wheat production was within an area experiencing drought.

Mixed Bag in Colorado

High winds in eastern Colorado have dried out fields and hurt winter wheat stands.

“Overall things are looking better than they did a year ago at this time,” said Madison Andersen, Colorado Wheat Administrative Committee Director of Communications and Policy. “However, it is a critical time for moisture, especially after the high winds and warm temperatures we have seen the last two weeks.”

In Nebraska, good to excellent winter wheat was at 68% as of April 7, but with the area’s dry and windy conditions, industry representatives say more rain is needed to make the crop. And in Wyoming’s southeastern region, USDA estimates that 91% of the wheat is in fair to good condition. That is up from 63% at the same time in 2023 and from the five-year average for this date of 74% fair to good.

USW will start publishing its 2024 weekly Harvest Reports after the combines start to roll in Texas. Follow the reports, posted every Friday, online here, or sign up here to have Harvest Reports emailed to you.

April 12, 2024/by Steve Mercer

Market and Crop Analysis, Supply and Demand, Tyllor Ledford, Wheat Production and Harvest

New USDA Report Estimates Less Wheat Planting, More Ending Stocks

On March 28, the United States Department of Agriculture (USDA) released its yearly Prospective Plantings and quarterly Grains Stocks reports. The reports provide crucial insights to U.S. wheat importers as we enter the concluding months of the 2023/24 marketing year and look ahead to the 2024 harvest. This article will analyze USDA’s recent reports on wheat planting and stocks and their implications as we look ahead to 2024/25.

Seeding Less

USDA estimates put the total U.S. wheat area at 47.5 million acres (19.2 million hectares), marking a 4% reduction from the previous year.

Breaking down the estimates by class, the area for winter wheat fell by 7% to 34.4 million acres (13.9 million hectares), with Hard Red Winter (HRW) wheat plantings decreasing by 5% on the year, Soft Red Winter (SRW) falling by 15%, and white wheat (winter and spring) decreasing by 2%. Meanwhile, the Hard Red Spring (HRS) area is expected to increase by 2%, while durum may rise by up to 22%.

Bar chart showing seeded area of 5 wheat classes between 15/16 and 24/25.

The 2024 wheat area is forecast at 47.5 million acres (10.2 million hectares), down 4% from 2023 but 500,000 acres (202,350 hectares) higher than the USDA Outlook Forum Estimates. The area consists of 24.3 million acres of HRW (approximately 9.83 million hectares), 6.26 million acres for SRW (about 2.53 million hectares), and 4.2 million acres of white wheat (roughly 1.7 million hectares). The HRS area is projected to reach 10.7 million acres (around 4.33 million hectares), while durum is estimated at 2.0 million acres (approximately 0.81 million hectares). The wheat area is forecast at 47.5 million acres (10.2 million hectares), down 4% from 2023 but 500,000 acres (202,350 hectares) higher than the USDA Outlook Forum Estimates. The area consists of 24.3 million acres of HRW (approximately 9.83 million hectares), 6.26 million acres for SRW (about 2.53 million hectares), and 4.2 million acres of white wheat (roughly 1.7 million hectares). The HRS area is projected to reach 10.7 million acres (around 4.33 million hectares), while durum is estimated at 2.0 million acres (approximately 0.81 million hectares).

When the 2023 U.S. winter wheat crop was seeded in 2022, income potential looked favorable, with prices still elevated by Russia’s invasion of Ukraine. As a result, total seeded wheat area for 2023 was up 8% from the prior year. With current prices falling in line with pre-war trends, and input prices lagging, profit margins have tightened, placing additional pressure on farmers and driving the downward shift in acres. Although the 2024 wheat area is down from last year, the overall area remains 2% higher than the five-year average and represents the second-largest area since the 2018/19 season.

Though the spring wheat and durum is not yet planted, favorable prices for durum relative to spring wheat may incentivize producers to substitute durum acres for HRS, particularly in non-traditional durum growing areas. As of April 3, the average country elevator bid for durum sits at $9.88/bu, a significant jump from an average bid of $5.92 for HRS. The favorable price spreads may push durum area as high as 2.0 million acres (810,000 hectares). If realized this would be the largest durum area since 2018/19.

Crop Competition

Profitability continues to drive crop competition, but an increasing reliance on crop rotations is moderating the impact. Farmers use rotations to reduce price risk and control disease cycles, making them less inclined to make significant acreage adjustments based on price alone.

According to USDA’s estimates, soybean area is anticipated to rise 3% to 86.5 million acres (approximately 34.99 million hectares), aligning with traders’ expectations. Meanwhile, the estimated corn area has decreased 5% to 90.0 million acres (about 36.42 million hectares), falling short of the anticipated 91.7 million acres (226.6 million hectares). However, when considering grain and oilseed acres in the context of all principal field crops, the share of acreage planted with wheat, corn, and soybeans remains relatively stable. Wheat and corn account for 15% and 29% of all acres, consistent with the ten-year average, while the proportion of acres planted with soybeans sits about 1% above the long-term average at 28%.

Line chart shows the number of acres planted to corn, soybeans and wheat annually from 15/16 to 24/25.

The combined area planted with corn, soy, and wheat decreased by 2% to 224 million acres (90.6 million hectares), down from the near-record 228.1 million acres (92.3 million hectares) from the previous year. Even so, the share of acreage planted with corn, soybeans, and wheat remains in line with the five- and ten-year averages. Source: USDA Prospective Planting s Report

Stocks: Up But Still Tight

Also released on March 28, the quarterly USDA Grain Stocks report put total wheat stocks at 29.6 MMT, as of March 1. On-farm stocks were estimated at 7.4 MMT, up 16% from last year, while off-farm stocks came in at 22.2 MMT, up 14% from the year prior. The increased stock levels bolster USDA’s ending stocks estimate of 18.3 MMT, marking an 18% rise from 2023/24 and the first increase since 2015/16. Increased ending stocks helps relieve short term pressure on the U.S. balance sheet.

Moreover, even as planted area is forecast to decrease, the prospects for increased yields and greater wheat production are optimistic as drought conditions improve across the U.S. Southern Plains. The first USDA Crop Progress report of the year indicates that 56% of winter wheat is in good to excellent condition, a significant improvement from 28% at the same time last year. Increased production will help loosen the U.S. balance sheet and diminish supply related price pressures.

Bar chart shows the annual U.S. wheat ending stocks level from 14/15 to 23/24.

On-farm stocks were estimated at 7.4 MMT, up 16% from last year, while off-farm stocks came in at 22.2 MMT, up 14% from last year. The increased stock levels help confirm higher ending stocks for 2023/24. As exports remain lackluster and domestic demand steady, the USDA ending stocks are expected to grow 18% to 18.3 MMT. Source: World Agricultural Supply and Demand Estimates

Nevertheless, underlying tightness remains. U.S. stocks still sit at one of the lowest levels since 2013/14, and with global wheat consumption surpassing production, the global stocks-to-use ratio (excluding China) has dropped to 20%, the lowest point since the 2007/08 season.

More to Come

With a looser balance sheet in the short term tempered by decreased acres, the recent 2024 crop reports provided a mixed sentiment. It is also important to note that USDA’s estimates are based on surveys of U.S. farmers current intensions and may be subject to change as planting ramps up in the coming weeks. With spring wheat planting only 1% completed and winter wheat 4% headed, a definitive statement regarding the 2024 crop is yet to be written.

Moving forward, the May 2024 World Agricultural Supply and Demand Estimates (WASDE) will provide further insights into the 2024/25 marketing year and the July 2024 WASDE will give the initial by-class wheat production estimates. Also, make sure to follow the weekly and monthly reports from USW and USDA on crop conditions, harvest, and production. As always, U.S. Wheat Associates remains committed to offering information and support as we transition into the 2024/25 marketing year.

By USW Market Analyst Tyllor Ledford.

April 4, 2024/by Steve Mercer

Market and Crop Analysis, Wheat Production and Harvest

Setting the Stage for the 2024/25 World Wheat Crop

As March begins, world wheat markets look to new information that may provide a glimpse into what the 2024/25 marketing year brings. As northern hemisphere winter wheat crops break dormancy, weather becomes increasingly important. Meanwhile, southern hemisphere farmers shift their focus to spring crops and the winter wheat planting season.

While world crop updates will help provide a snapshot of global wheat production and latest conditions over the next few months, U.S. Wheat Associates (USW) is taking this early look at how the 2024/25 world wheat crop is shaping up.

USDA world map showing the current state of major crops around the world including world wheat.

In March, much of the world wheat crop will enter its vegetative state in the northern hemisphere. Although, it is not as sensitive to heat and temperature stress in this stage, conditions can still influence the crop’s yield potential. Source: USDA Monthly Crop Stage Calendar.

Southern Hemisphere

The southern hemisphere planting program generally begins in April and continues through August, with harvest occurring between October and February, depending on the specific latitude. For marketing year 2023/24, the harvest is complete, with near-final production numbers available for major wheat-producing. Over the last month, Australia and Argentina have benefited from scattered showers and warm weather, boosting yield potential for summer crops, and helping replenish soil moisture for winter wheat planting. Looking ahead, weather analysts predict the potential for a rapid transition from an El Niño weather pattern to a La Niña event between June and August, which will impact weather patterns in the latter half of 2024.

This interactive image shows the predicted transition from an El Nino to La Nina global weather phenomenon that will impact world wheat production.

Climate models anticipate that the El Niño weather event will dissipate between April and June, with potential for a rapid transition into another La Niña weather cycle, influencing the 2024/25 wheat crop in the southern hemisphere. Source: NOAA.

Argentina – The 2023/24 wheat harvest is complete in Argentina, with USDA production estimates at 15.5 MMT, up 3.0 MMT from the previous year. Production is much improved from drought the year prior, though it still sits 12% below the five-year average.

Australia – USDA put Australian wheat production at 25.5 MMT, while the Australian Bureau of Agricultural and Resource Economics (ABARES) estimate was 26.0 MMT for 2023/24. ABARES projected that the 2024/25 harvest may reach upwards of 28.4 MMT due to increased precipitation expected from the transition into a La Niña weather pattern.

Northern Hemisphere

Due to the large geographic area and delineation between winter and spring wheat, northern hemisphere crop calendars vary significantly by region. Winter wheat is generally planted between September and November, while harvest runs from the south to the north from through September. Spring wheat planting typically begins in April and wraps up in June, while harvest can start in July and finish in September. Although the region is geographically diverse, recent weather has been relatively mild across the northern hemisphere; however, winterkill remains a concern in areas with low snow coverage following a cold snap in January.

Canada– The Canadian Grain Commission puts 2024 production at 33.9 MMT. Despite a decrease in acreage from 10.9 million hectares to 10.7 million hectares, the commission expects production to increase on normalized weather and alleviated drought pressure. However, moisture deficits remain in the wheat-producing provinces of Alberta and Saskatchewan. Much of the crop has not yet been planted, but Statistics Canada will release its crop intentions report on March 11.

This map of Canada shows current drought conditions as of Jan. 31, 2024.

Long term moisture deficits persist in some of the wheat producing regions of Alberta and Saskatchewan after the drought in 2023/24, a factor to watch moving into 2024 harvest. Source: Canadian Grain Commission.

United States – For harvest in 2024, USDA forecasts total winter and spring wheat planted area at 47.0 million acres (116.1 million hectares), down from 49.6 million acres (122.5 million hectares) in 2023. The USDA Prospective Plantings Report on March 31 will provide additional insight into U.S. wheat plantings. The USDA Grains and Cereals Outlook put U.S. 2024/25 production at 51.7 MMT. Weather remains generally warm in the U.S. Plains, helping winter wheat transition from dormancy.

EU – The EU planted area sits at a four-year low, down 3% to 23.3 million hectares. Wet fall weather inhibited some farmer’s ability to plant in France, Germany, and Poland. Some private analysts have 2024/25 EU production estimates at 142.3 MMT. The weather has been warm and dry in western Europe, contrasting cool and wet weather in the east.

Russia – Private analysts forecast Russian production at 87.7 MMT for 2024/25, while Russian government analysts put output at upwards of 93.0 MMT. Mild weather and above-average precipitation have prevailed across much of Russia, although a cold snap may have slowed crop development in the Volga region.

Ukraine – Similar to Russia, the weather has been warm, accelerating winter wheat transition from dormancy. Estimates are Ukraine has planted approximately 4.2 million hectares for the 2024 harvest, down from 4.4 million hectares last year.

This map of Europe, North Africa, and western Russia indicates temperatures in February 2024 were generally warmer than normal with effect on world wheat production.

Weather has been warmer than normal throughout Europe, accelerating crop development and aiding in spring fieldwork. Source: JRC MARS.

Today’s recap is only a snapshot of the current world wheat situation, which will change as the 2024/25 crop develops and enters different stages of production. As always, weather will ultimately dictate where final production numbers will land. Until then, buyers can look to U.S. Wheat Associates and its state wheat commission members for up-to-date information on crop conditions, weather, and the global supply and demand situation.

By USW Market Analyst Tyllor Ledford

March 6, 2024/by Steve Mercer

Food Aid, National Association of Wheat Growers, Wheat Industry News, Wheat Production and Harvest

Wheat Industry News

News and Information from Around the Wheat Industry

Speaking of Wheat

“Locks and dams on the Lower Snake River and the Columbia River provide essential infrastructure for moving U.S.-grown wheat to high-value markets around the world. We cannot overstate the positive value they create for U.S. farms, [the] economy of the Pacific Northwest and far beyond.” – From USW letter to House subcommittee hearing on the Columbia Snake River System

Happy Chinese New Year!

The U.S. Wheat Associates (USW) Beijing office sent the digital “Happy Chinese New Year” card at the top of the page. We all hope “The Year of the Dragon” is safe and prosperous for the U.S. friends we represent, for our customers, and for our USW colleagues!

Past Chair Brian O’Toole Honored

Brian O’Toole, a past USW chairman and a partner in the sixth-generation T.E. O’Toole Farms has been named to the North Dakota Agricultural Hall of Fame. O’Toole served for 12 years on the North Dakota Wheat Commission, chaired the North Dakota Crop Improvement and Seed Association. He served for 16 years at the Wheat Marketing Center in Portland, Ore. During his years of service, O’Toole promoted North Dakota and U.S. wheat on trade missions to 23 countries. He has received Outstanding Young Farmer, Master Farmer, and Premier Seed Grower Awards. Congratulations, Brian, and thank you for your service! Read more here.

Brian O'Toole with Japan Flour Millers Association member.

Then USW Chairman Brian O’Toole presented this gift from U.S. wheat farmers to the Japan Flour Millers Association in 2015.

Winter Wheat Serves Conservation and Food Security

Kansas Wheat shared information about the National Association of Wheat Growers (NAWG) is advocating to officially classify intentionally seeded winter wheat as a “cover crop” under USDA’s Natural Resources Conservation Service (NRCS) and other “climate-smart” programs, while not impacting its eligibility as a harvestable cash crop insurable through federal programs. “Climate-smart” activities like cover crops help farmers continue to be the best stewards of their lands, but winter wheat has been overlooked as a vital tool in both conservation and food security.

NAWG Recruiting Communications Professional

The National Association of Wheat Growers (NAWG) has a job opening for Director of Communications and Partnerships. The position’s main role is to oversee all media requests, publish the weekly newsletter and monthly podcast, communicate conference responsibilities, and help cultivate industry partnerships. Applications need to be submitted to [email protected] by Feb. 14, 2024.

February Cereal Sciences Events Calendar

Dr. M. Hikmet Boyacioglu of KPM Analytics compiles a listing of noteworthy worldwide conferences, expos, symposiums, and other events for the grains, milling, and baking industries. Visit https://lp.kpmanalytics.com/en-us/cerealgrain-science-event-calendar to download the February calendar and future posts.

NCI Announces Leadership Changes

The Northern Crops Institute (NCI) named Technical Manager David Boehm and Program Development Manager Dr. Casey Peterson as interim co-directors. The two will fill the role of Mark Jirik, who announced in December that he would step down after nearly six years heading the institute. The NCI and NDSU will begin their search for a permanent NCI director this spring. The change in leadership comes as the NCI is preparing to move into its new home at the Peltier Complex on the campus of North Dakota State University. The NCI and NDSU will begin their search for a permanent NCI director this spring. “Both David and Casey know the organization very well and will do a great job of leading the organization until a national search can be concluded,” said Matt Swenson, vice chair of the Northern Crops Council, a member of the North Dakota Oilseed Council and member of the interim search committee.

U.S. Miller Supports Soft Red Winter Wheat Development

U.S. Wheat was pleased to participate in the “Double Crop Farmers’ Forum” sponsored by the Illinois Wheat Association and the Illinois Soybean Association Feb. 5, 2024. At the meeting, the University of Illinois College of Agricultural, Consumer and Environmental Sciences announced that Siemer Milling Company, Teutopolis, IL, made a major gift to the college’s Department of Crop Sciences to, in part, fund an endowed chair in wheat breeding. Professor Jessica Rutkowski, the University wheat breeder, will be the first to hold this chair. Illinois farmers annually produce more soft red winter wheat than any other state. To see how Siemer Milling ensures the highest quality wheat for its grist, watch this video.

Group of people in front of a large room.

Announcing the Siemer Milling Company gift at the Double Crop Farmers’ Forum in Mt. Vernon, Ill., were (left to right) University of Illinois Dean Germán Bollero, Crop Sciences Department Head Adam Davis, President Richard Siemer, Siemer Milling Company, and Professor Jessica Rutkowski, small grains breeder and quantitative geneticist, who will hold the first Siemer Milling Company Professorship.

February 8, 2024/by Steve Mercer

Desert Durum, Hard Red Spring, Hard Red Winter, Hard White, Market and Crop Analysis, NASS, Soft Red Winter, Soft White, Wheat Production and Harvest

Early Optimism Blooms for 2024 U.S. Winter Wheat Production

Drought in major U.S. wheat-growing regions over the past few years is well-documented. The persistent dry conditions acutely impacted U.S. wheat yield and increased abandonment, with 2023/24 production coming in 6% below the pre-drought five-year average. Now, entering the second half of the marketing year, the focus has shifted to the 2024 harvest and its impact on both U.S. and global supply and demand. Although it is early, optimism has begun to bloom for the 2024 winter wheat harvest, and the following highlights the factors that have helped boost the U.S. wheat outlook.

Acreage Down, But Conditions Improved

The Winter Wheat and Canola Seedings Report, published on Jan. 12, put the preliminary winter wheat acreage at 34.4 million acres (m.a.) (34.3 million hectares), down 6% from 2023 but still 4% ahead of the five-year average. The hard red winter (HRW) wheat area is estimated at 24.0 m.a. (9.7 million hectares), down 5% on the year, while the soft red winter (SRW) area is approximately 6.89 m.a. (2.8 million hectares), a 7% decrease. The white winter wheat (including soft white and hard white winter) area came in at 3.5 m.a. (1.4 million hectares). Desert Durum^® seedings in Arizona and California for the 2024 harvest are estimated at 65,000 acres (26,300 hectares) total, up 16% from 2023 and 48% below 2022.

This bar chart shows U.S. wheat planted area by class between 2013/14 to 2023/24.

According to the Winter Wheat and Canola Seedings Report, published on Jan. 12, the winter wheat acreage is estimated at 34.4 m.a., down 6% from 2023 but still 4% ahead of the five-year average. The HRW area is estimated at 24.0 m.a., SRW at 6.89 ma, and the white winter wheat area came in at 3.5 m.a. Desert Durum® seedings in Arizona and California are estimated at a combined 65,000 acres. Source: USDA Winter Wheat and Canola Seedings Report.

Moving toward fall of 2023, moisture helped replenish dry soil in the U.S. Southern Plains, aided planting, and supported early-season growth and emergence, while making visible improvements in the U.S. Drought Monitor. According to USDA, as of Jan. 30, 2024, winter wheat area in drought registered at 17%, down from 22% the week prior and 58% last year. Meanwhile, the last aggregate USDA Crop Progress Report, published on Nov. 27, 2023, put 50% of winter wheat in the good to excellent category, the highest since 2020.

This line chart shows the percentages of U.S. winter wheat rated "good to excellent" from 2015 to 2024.

The last national USDA Crop Progress Report put 50% of the U.S. winter wheat crop in good to excellent condition, the highest since 2020. Source: USDA NASS Data.

Despite the decreased acreage, the cautious optimism about wheat conditions suggests the potential for improved yield and reduced abandonment for the 2024 harvest. Improved yields will provide a welcome boost to U.S. wheat production, helping improve supply and relieving pressure on the U.S. balance sheet and wheat prices.

An Early State-by-State Snapshot

Comments from producers at a recent meeting of the U.S. Wheat Associates (USW) Wheat Quality Committee echoed the optimistic sentiment. However, despite the objectively improved crop outlook from the year prior, winter conditions have started to vary as the season progresses, serving as a reminder that much can change before harvest time.

Following are condition recaps in major winter wheat-producing states from committee members and National Agricultural Statistics Service (NASS) data as of Jan. 28:

Kansas. Data from NASS rates 54% of Kansas winter wheat good to excellent, and optimism has bloomed regarding the 2024 harvest. Kansas wheat farmer and USW Secretary-Treasurer elect Gary Millershaski highlighted visible improvements to wheat stands compared to the previous year.

Texas. NASS data put Texas wheat conditions at 42% good to excellent, while Texas farmers remain optimistic about current conditions.

Oklahoma. An Oklahoma farmer commented that soil moisture remains adequate, and the wheat entered dormancy in good condition. Oklahoma crop conditions rated 63% of the crop in the good to excellent category.

Colorado. About 61% of the crop sits in the good to excellent category, though winds and dry weather this winter may cause some condition deterioration.

Nebraska. According to a Nebraska farmer, rain during planting helped boost conditions, and the stands continue to benefit from the soil moisture. Current conditions put Nebraska winter wheat at 69% good to excellent.

South Dakota. South Dakota Wheat Commission CEO Jon Kleinjan commented that the state’s HRW wheat was seeded with adequate moisture. As good snow cover remains, he is optimistic about the 2024 crop. Likewise, NASS put 53% of winter wheat in good to excellent.

Montana. Approximately 41% of the HRW crop sits in the good category; however, cold and a lack of snow coverage have negatively impacted crop conditions this winter.

USDA/NOAA Map of Winter Wheat in Drought from Jan. 30, 2024.

According to the weekly USDA Agriculture in Drought Report, as of Jan. 30, 2024, 17% of U.S. winter wheat resides in areas experiencing drought, down from 22% last week and much improved from 58% last year. Source: U.S. Agriculture in Drought.

More Data to Come

The upcoming USDA Prospective Plantings Report will provide preliminary estimates for spring wheat, durum, and the white spring wheat area and update the winter wheat estimates. It is important to remember that the 2024 harvest is still months away, and conditions can and will change as the crop year progresses. Nonetheless, even after an extended drought, U.S. wheat farmers remain resilient and committed to growing a reliable supply of high-quality wheat for their customers around the world.

By USW Market Analyst Tyllor Ledford

February 7, 2024/by Steve Mercer

Supply and Demand, Wheat Prices, Wheat Production and Harvest

Inputs and Profits: Current Conditions Prove There’s Nothing Magical About Farming Math

Kitchen table math can be a chore this time of year, as U.S. wheat farmers shovel their crop production costs into calculators, hoping the numbers they scoop out next year will be magically heavier than those they tossed in this year.

But here’s a secret about the math of farming: it isn’t really magic.

“There’s a lot of work and a lot of luck involved in making a profit in our business,” is how U.S. Wheat Associates Chairman Michael Peters put it. “The numbers are rarely where you need them to be or where you want them to be.”

An important thing for customers of U.S. wheat to keep in mind is that input costs and the prices farmers receive for their crops each year go a long way toward determining which crops farmers choose to plant the next year.

“The goals of a U.S. farmer are to help feed the world and to also feed our own families,” said Peters, who grows wheat and raises beef cattle in Oklahoma. “We make a lot of decisions each year based on market conditions and expenses. And those are two things that tend to go up and down a lot. They are never stagnant.”

This chart by USDA shows the average cost per acre to produce crops in the U.S. between 2020 and 2024. According to USDA, among the major field crops, the cost-of-production for wheat is forecast to be the lowest at $416 per acre, down 2.3%.

Farming’s ‘Reality’ Math

Although 2023 input costs have been, in general, mostly lower than the costs wheat farmers endured a year ago, a profitable 2024 is far from guaranteed. While crop production expenses have fallen a bit and are expected to remain lower compared to last year’s cycle, commodity prices – including the prices paid to farmers for their wheat – are also forecasted to be lower.

That’s farming’s reality math.

Wheat prices have declined about 27% since the start of 2023, according to Rabobank, and now trades at levels well below those seen before the war in Ukraine began in early 2022. Lower wheat prices are attributed mostly to strong Russian wheat production and a pattern of opportunistic import purchases.

Despite lower prices, farmers appear committed to putting wheat in the ground. In its most recent forecast, USDA put the planted area for wheat that will be harvested in 2024 at 48 million acres, which would be down 1.2 million acres from the 49.6 million acres in 2023 but above the 5-year average of 46.4 million acres.

In general, the cost of putting wheat seed into the ground in 2023 saw a slight decline in many parts of the country, as fertilizer and fuel costs dropped after spiking the past two years. However, wheat prices also fell, cutting into potential farmer profits.

Better and Worse

In mid-2024, USDA’s Economic Research Service released a cost-of-production forecast for major field crops that included updated projections for 2023 costs and the first look at estimated production expenses for 2024. Notably, input costs for the 2024 growing season are expected to be the third-highest all-time, behind only 2022’s record-high and 2023’s second-all-time high.

The slight downward trend in input costs does hold some promise, farmers say.

“Chemical prices are probably half of what they were and fertilizer prices are down 30% to 40%, maybe 50% in some cases, depending on the product,” said North Dakota wheat farmer and USW Secretary-Treasurer Jim Pellman. “Fuel prices have moderated a little bit. So generally, major inputs have reduced the last couple of years. But at the same time, you’re seeing lower prices. The best-case scenario for a farmer is low inputs and high grain prices. The worst-case scenario is high inputs and low prices. We are not seeing either of those right now. So it could be better, but it could be worse.”

This chart provided by USDA shows the percentage change in farm production expenses between 2020 and 2023.

Some Hope for Wheat Growers?

While input costs remain relatively high, according to USDA, among the major field crops, the cost-of-production for wheat is forecast to be the lowest at $416 per acre, down 2.3%. Yet challenges remain.

“Describing the last three years of global agricultural commodity prices as volatile is an understatement,” said Carlos Mera, head of agri-commodities at Rabobank. “Producers are still grappling with the after-effects of war, adverse weather, high farm input inflation and weak consumer demand, but eyeing 2024 as the return to a semblance of normality.”

Winners and Losers

Rabobank predicts that prices wheat will remain subject to weather and export-related uncertainty, as it has for several years now.

“Winners and losers will emerge as agricultural commodities go through different points of the cycle next year,” Mera said.

For wheat, Rabobank expects another supply deficit in the global market. There will be little relief from the Southern Hemisphere crops in the coming months, with both Argentina and Australia underperforming. El Niño could leave fields in Australia with little moisture ahead of the 2024 planting season, according to Rabobank.

U.S. wheat farmers have been through these kinds of up-and-down supply and demand cycles before. They do their best to make planting decisions based on the best information they have in the fall and spring each year.

“The difficult part for a farmer is that we have to make our planting plans far in advance, well before we know exactly what the market is going to be like at harvest time,” explained Pellman. “We can’t predict the weather, either. That’s our world. But, we are still able to produce a high-quality crop every year.”

November 30, 2023/by Ralph Loos