Wheat Letter Blog Archive - Page 17 of 104

U.S. Wheat Customers in Latin America Voice Appreciation for 2023 Wheat Buyers’ Conference

The first U.S. Wheat Associates (USW) Latin American and Caribbean Wheat Buyers’ Conference since 2018 was a major success, with more than 150 buyers, traders and logistics professionals coming together in Puerto Vallarta, Mexico to meet representatives of the U.S. wheat industry – including a handful of producers. In the short video below, customers from across the region express their appreciation for the opportunity to learn about the 2023 U.S. wheat crop and discuss the U.S. wheat supply chain. . .

August 14, 2023/by Ralph Loos

Columbia Snake River System, Soft White, Sustainability

Stories of Stewardship: Preserving Productive Soil in Washington State

Whitman County in eastern Washington State is the most productive wheat-producing county in the United States. There, near the town of St. John in “The Palouse,” the Bailey family has grown winter and spring soft white and club wheat and barley for three generations.

Erin Bailey and her father Mark Bailey working on equipment on their farm in eastern Washington state as part of the Stories of Stewardship campaign.

Erin Bailey and Mark Bailey farm with Mark’s brother Gary in eastern Washington’s Palouse country. “It is my responsibility to [farm] sustainably to provide for the next generations of our family,” Erin said.

Gary Bailey (above with a team of wheat buyers from Myanmar and Malaysia) farms with his brother Mark Bailey and Mark’s daughter Erin. He serves on the Washington Grain Commission and represents his state as a Director of U.S. Wheat Associates. He also serves on Washington State University’s Land Legacy Council.

“Whitman County has deep, fertile soils and adequate rainfall to produce a great dryland wheat crop,” Gary said. “And we want to keep it around for the next generation. So, we are doing whatever we can to maintain that soil base and, in fact, to improve it.”

Reducing Environmental Impact

According to the Washington Grain Commission, over many generations, wheat farmers in the state have embraced stewardship and successfully reduced their environmental footprint while remaining highly productive. The adoption of no-tillage and reduced tillage equipment and systems has helped them dramatically reduce soil erosion. Precision technology has helped reduce the volume of crop protection inputs needed to ensure wholesome and productive crops.

“Protecting our farmland is one of the major challenges we face,” said Mark Bailey. “So we have to continually change the ways we grow wheat and other crops and do the best job we can to keep those resources for the next generation and the next.”

Learn More

Gary, Mark, and Erin Bailey shared more about preserving their land and growing safe, wholesome wheat for their family and the world in the following video story produced in 2020.

U.S. Wheat Associates (USW) is reaching out to wheat farmers across the United States to learn how they strive to improve their land and manage resources. Each is committed to adapting to the many challenges they face and making choices that are best for the environment, their individual farms, and their customers. We are proud to share their “Stories of Stewardship.”

August 8, 2023/by Steve Mercer

Marketing and Trade Conferences

Video: 2023 USW Latin American and Caribbean Wheat Buyers’ Conference

Customers of U.S. wheat and the U.S. wheat industry gathered in Puerto Vallarta, Mexico for the 2023 U.S. Wheat Associates (USW) Latin American and Caribbean Wheat Buyers’ Conference. Organized and presented by four USW offices, it is the first buyers’ conference held in the region since 2018. Some scenes from the first day of the conference (August 3) can be seen in this short video . . .

August 3, 2023/by Ralph Loos

Market and Crop Analysis, Plant Breeding Innovation, Trade Negotiations and Barriers, Wheat Industry News

Wheat Industry News

News and Information from Around the Wheat Industry

Speaking of Wheat

“The abrupt termination of the implementation of the Black Sea Grain Initiative is a matter of grave concern. Global food security should not become a casualty of war. People in poor countries struggling with food and energy price inflation stand to be hit hardest by the termination of the initiative: Prices for future delivery of wheat and corn are already rising. Therefore, I urge all parties to make every effort to come back to the negotiating table.” — World Trade Organization Director-General Ngozi Okonjo-Iweala, from an Inside U.S. Trade article. Read more here.

Political cartoon by Michael de Adder, The Washington Post, of Russian President Putin holding a bag labelled "Grain" hostage with a gun.

Copyright Michael de Adder, The Washington Post

Club Wheat Outlook

Matthew Weaver with Capital Press interviewed Washington Grain Commission Executive Director Casey Chumrau about the 2023 club wheat crop and the outlook for 2014. The region’s wheat industry anticipates lower yields overall this year compared to last. Outlook for club production is unclear at this point, Chumrau said. “A lot of the planted area for club is in regions in Washington where it still is looking promising for production,” she said. “The club acres seem to be in some of those areas with better prospects.” Read more here.

Prepare for Global Drought

In a World-Grain.com article, World Weather, Inc., agricultural meteorologist Drew Lerner writes about the risk of future global drought and the need to prepare for a serious food shortage. “A series of serious droughts occurred in 2007-08 that resulted in reduced food supply in portions of North America, eastern Asia, Southeast Asia, Australia and parts of South America,” he wrote. “Most of the droughts at that time did not impact each of the listed regions of the world at the same time, but enough production cut occurred to lead to the first modern day grain and oilseed supply shortage. The world muddled its way through that event mostly unscathed, but what about the future? Will we be lucky enough to get along with limited food stocks?” Read more here.

South Dakota State University wheat breeder Dunish Sehgal in a wheat field.

Dr. Sunish Sehgal. Photo copyright South Dakota State University.

Honored Wheat Breeder

Sunish Sehgal, associate professor and South Dakota State University (SDSU) winter wheat breeder, was honored by the Wheat Quality Council with the 2023 Millers Choice Best of Show Award for the second consecutive year. The honor annually recognizes the wheat breeder of the variety that is most well-liked by U.S. millers participating in the WQC’s evaluation program. The main goal of the SDSU hard winter wheat breeding group is to develop high-yielding wheat varieties with resilience to biotic and abiotic stress and provide end-use quality for the milling and baking industry. “At SDSU, we lay as much emphasis on wheat quality as on yield,” Sehgal said. Read the full story here.

Grain Sciences Event Calendar

Dr. M. Hikmet Boyacioglu, Applications Development Specialist with KPM, shares a monthly “Cereal & Grain Sciences Events Calendar. The August calendar is now online. See it and upcoming monthly calendars at https://lp.kpmanalytics.com/en-us/cerealgrain-science-event-calendar.

Subscribe to USW Reports

USW publishes various reports and content available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts and wheat industry news, the weekly Price Report, and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online

Visit our Facebook page for the latest updates, photos, and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter, video stories on Vimeo and YouTube, and more on LinkedIn.

August 3, 2023/by Steve Mercer

Export Basis, Exports, Futures, Hard Red Spring, Market and Crop Analysis

Historically Low PNW HRS Export Basis Demonstrates Buying Opportunity

As the geopolitical conflict between Russia and Ukraine comes back into focus following the attacks on port infrastructure in the Ukrainian Black Sea ports of Odesa, Chornomorsk, and the terminals along the Danube River, wheat market volatility remains an ever-present risk.

Despite the recent swings, export basis trends can help provide clues to potential buying opportunities for U.S. wheat classes. In recent months, we have seen Pacific Northwest (PNW) hard red spring wheat (HRS) export basis erode from $1.75 per bushel ($64.30 per metric ton) in November 2022 to $0.80 ($29.40) in July 2023. Considering the recent drifts, this article will investigate the PNW HRS basis trend and provide additional context around the weakening basis.

A line chart showing export basis in dollars per bushel of wheat indicates basis has declined $1.75 per bushel since December 2022.

PNW HRS basis has drifted down since the start of 2023, recently hitting lows not seen since 2007, hovering 90 cents below last year’s level. Below average basis poses a unique opportunity for those interested in purchasing PNW HRS. Source: U.S. Wheat Associates Price Report.

Slow Demand Meets Seasonal Weakness

Otherwise known as the difference between the free on board (FOB) cash price and the futures price, export basis encompasses transportation costs, storage, and supply and demand at the regional level (e.g., farmer sales, local demand), and can fluctuate based on seasonality. In the pre-harvest months, basis generally weakens as the market looks to the influx of new crop stocks. Though a weaker basis is common for this period, unique to this year, the pace of farmer selling has remained slow. Throughout 2023, exporters noted low farmer sales, and USDA’s June Grain Stocks report noted on-farm stocks increased 34% from the year prior. In the last few weeks, farmer sales increased with the increased volume helping drive down basis.

Meanwhile, demand for U.S. wheat has also been relatively light. In 2022/23, commercial U.S. wheat sales were 20.7 MMT, down 4% from the year prior. So far in 2023/24, the U.S. export pace remains slow, tracking 32% behind last year at the same time.

The combined impact of seasonal weakness, the release of farmer-held stocks, and slow export demand have quickly eroded basis. Last week’s basis level of $0.75 ($27.56) signifies the weakest PNW HRS basis since July 2007. For this time of year, the current basis level is 51% below the ten-year average and down 90 cents per bushel from last year. The historically low basis level presents an opportunity for U.S. wheat importers to make purchases of HRS from the PNW or to lock in a low basis contract.

A line chart showing market volatility related to geopolitical tensions in the U.S. wheat futures markets and prices.

Wheat futures continue to fluctuate based on the global supply and demand situation and the erratic influences of geopolitics, weather. The most recent example is the response to the airstrikes in Ukraine last week. CBOT futures closed limit up at $7.57/bu; however, by the end of the week, CBOT futures were down 53 cents at $7.04/bu. Source: U.S. Wheat Associates Price Charting Tool.

With Proper Risk Management Opportunity Awaits

Despite the historically low basis, volatility presents a risk in the market. On July 24, Chicago Board of Trade (CBOT) wheat futures were limit up in response to the airstrikes in Ukraine, closing at $7.57/bu; however, by the end of the week, CBOT futures were down 53 cents at $7.04/bu.

Every marketing year presents new challenges and opportunities for buyers of U.S. wheat, and this year is no exception. Markets are volatile, but unique buying opportunities continue to arise. With proper risk mitigation, U.S. wheat importers can capitalize on opportunities for purchasing U.S. wheat and maximize the value of U.S. wheat classes, even in unpredictable times. Contact your local U.S. Wheat Associates office for more individualized information on risk mitigation strategies for your business and opportunities for U.S. wheat.

By U.S. Wheat Associates (USW) Market Analyst Tyllor Ledford.

August 2, 2023/by Steve Mercer

Hard White, Kansas Wheat

Kansas Wheat Industry Looks at 2023 Hard White Wheat Production and Quality

This article on the hard white (HW) wheat crop in Kansas was sponsored by the Kansas Wheat Commission, Kansas Association of Wheat Growers, Kansas Grain and Feed Association and the Kansas Cooperative Council.

Hard white (HW) winter wheat varieties continue to be popular among some western Kansas farmers for their high yields, disease resistance and quality. As U.S. wheat importers understand, the biggest challenge for hard white is market liquidity and continuity of trade into the marketplace.

Kansas Wheat continues to work with the grain handling industry and Federal Grain Inspection Service to revise the grain standards to facilitate HW movement in domestic and international markets and lessen the burden on grain handlers. For additional information on Kansas Wheat’s comments submitted to FGIS, visit https://www.federalregister.gov/documents/2022/10/12/2022-22113/united-states-standards-for-wheat.

HW winter wheat is very similar to hard red winter (HRW) wheat apart from a gene impacting the color of the outer bran coat. It can be used for stand-alone whole wheat products with a lighter color or can be used interchangeably by mills with HRW, depending on protein and extraction needs.

Hard white wheat had been growing in export demand, primarily to Nigeria out of the Texas Gulf, but the past two years of drought-stricken production shortfalls have impacted that business.

A close up photo of hard white wheat kernels against a white background.

Hard white wheat has a hard endosperm, white bran and a medium- to high-protein content of 10.0% to 14.0% (12% mb). HW includes winter and spring varieties increasing the protein range and functionality within the class.

A Regular Joe

A HW variety named “Joe” is the top seeded variety in west central Kansas, making up 14.3% of planted acres. Hard white wheat varieties also make up 11.4% of acres in southwest Kansas. Overall, HW was seeded on 4.7% of Kansas’ 8.1 million acres, accounting for 380,700 acres seeded to HW in fall 2022. In these areas, the multi-year drought caused many seeded acres to be abandoned, including an estimated 60% of Kansas’ dryland hard white wheat acres.

HW winter and spring wheat is also grown in Colorado, Nebraska, Idaho, and California. The U.S. Wheat Associates (USW) Hard White Wheat Committee estimates U.S. total hard white wheat production to be just about 463,000 metric tons.

Overall, the quality of this year’s HW crop is excellent. While southwest Kansas had to abandon many acres, HW production increased in areas to the north.

More than Expected

Eric Sperber from Cornerstone Ag, an up-country elevator in Colby, Kan., said they have received four times the HW they got last year. At this point, HW makes up about 40% of their bushels.

“It’s a lot more than I was anticipating,” said Sperber. “It has been a number of years since we [received] this much white wheat.”

Overall, the quality of this year’s HW crop in the Colby area is comparable with the HRW wheat, with test weights ranging from 57 to 60 pounds per bushel, with the average ending up on the lower end with the delayed harvest. Earlier-harvested HWhad higher test weights, which has decreased after last week’s rain. Proteins consistently averaged 12.5% (12% moisture basis).

Results from the 2023 Hard White Wheat Quality Survey will be available from U.S. Wheat Associates and other sources online in October.

July 31, 2023/by Steve Mercer

Hard Red Winter, Sustainability

Stories of Stewardship: Generations of Care in Central Kansas

As a 5th generation farmer and father of three working alongside his own father and brother, Justin Knopf (above) recognizes his responsibility as a steward of the land for the next generation both on and off the farm. On the farm in central Kansas near the town of Gypsum, the Knopf family grows hard red winter (HRW) wheat, alfalfa, grain sorghum, soybeans, and corn on the same land the family originally homesteaded in the 1860’s.

Justin is passionate about being involved in the industry and says outreach is an important part of agricultural sustainability.

“What I do impacts consumers, so it is important to take time and energy to be transparent with them and share the bigger story of what is happening in our landscape,” he says. “I have been given a gift to be able to work with the land and that comes with responsibility.”

Cover Crops

Justin is always learning new farm management skills and how he can apply the latest technology. After attending a no-tillage farming conference, he learned that an evolving no-till system includes having a crop always growing in the soil. After experimenting with cover crops in his rotation, the results show this boosted biological diversity in his soil and at times allowed him to reduce the use of weed, disease, or insect control products where cover crops are grown.

Improving the Soil

Quality soils are crucial for crops to reach their full potential, but abuse can quickly lead to nutrient loss, erosion, and reduced productivity. Farmers on the Plains witnessed the cost of over-plowing their soil in the Dust Bowl of the 1930s and since then have fought hard to protect their most precious resource.

The Knopf family has invested in soil health through cover crops, no-till farming, and crop rotations. The changes have improved soil health. The soil is better able to retain moisture and is more fertile, which helped reduce inputs like fertilizer and fuel and increased yields. But these changes did not happen easily or overnight. Adding these new management practices required a financial investment, continued education and dedication from Justin and his family.

Panaramic image of the Knopf family farm in central Kansas including a farm stead, green fields and ripe wheat field in the background on a cloudy day.

The Knopf family grows hard red winter wheat, alfalfa, grain sorghum, soybeans, and corn on the same central Kansas land the family homesteaded in the 1860’s. Photo courtesy of Kansas Wheat.

Keeping the Soil

There is no irrigation or tillage on the entire Knopf family farm. Since the family transitioned to no-till farming in the early 2000s, Justin says he has seen a physical change in their soil. The soil is darker, richer and has more organic matter than before. These rejuvenated soils are more productive and resilient, making it easier to grow crops with fewer inputs and less rain (something that has been even more important given the recent long drought in the region), and are less likely to erode.

“The land will go on for much longer than I will be here, and it’s a much bigger story outside of myself,” Knopf says. “So I feel a responsibility to share that bigger story of what is happening with other people as a part of our stewardship.”

Knopf participated in the U.S. Wheat Associates (USW) film “Wholesome: The Journey of U.S. Wheat” discussing the care he takes in his wheat crop with sustainable practices.

U.S. Wheat Associates (USW) is reaching out to wheat farmers across the United States to learn how they strive to improve their land and manage resources. Each is committed to adapting to the many challenges they face and making choices that are best for the environment, their individual farms, and their customers. We are proud to share their “Stories of Stewardship.”

July 31, 2023/by Steve Mercer

durum, Hard Red Spring, Northern Durum

Spring Wheat and Durum Tour Provides Insight, Interaction for U.S. Wheat Industry Stakeholders

USW Director of Trade Policy Peter Laudeman during one of the many stops on the 2023 Spring Wheat and Durum Tour across North Dakota.

Participating in the Wheat Quality Council’s Spring and Durum Wheat Tour for the first time, U.S. Wheat Associates’ (USW) Peter Laudeman was eager to discover what he could learn about the 2023 crop across an important section of the Northern Plains.

He wasn’t disappointed.

The tour, which included examination of more than 300 spring wheat and durum fields in North Dakota and western Minnesota, was supplemented by information about the timing of the current crop, along with the weather patterns that affect it.

“Overall, we saw a wide variety of crop conditions, with the conditions and maturity largely depending on planting dates,” reported Laudeman, USW’s Director of Trade Policy. “In general, the later planted wheat looked like it may have better potential as long as it has enough time to mature.”

Production. Process and People

Not only did Laudeman experience differing field conditions on the Wheat Quality Council’s Spring Wheat Tour, he was also able to participate in the analytics: those on the tour were asked to write down details and measurements from each field, with those measurements used to help formulate yield estimates.

Importantly, he was also able to interact with a sizeable cross-section of the U.S. wheat industry.

“There was a diverse variety of people from across the wheat value chain, many who were getting into wheat fields for the first time,” Laudeman explained. “It was especially great to see so many participants from the USDA, including representatives from the Foreign Agricultural Service (FAS) who will be able to use their experience with the tour as a concrete proof point in their work with overseas customers for U.S. commodity exports.”

The tour included the examination of more than 300 spring wheat and durum fields in North Dakota and western Minnesota. It was supplemented by information about the timing of the current crop, along with the weather patterns that affect it.

2023 Crop Looks ‘Average’

The three-day tour wrapped up July 27 with presentations in Fargo by the Northern Crops Institute (NCI) at North Dakota State University (NDSU). Overall, reports from the tour indicate North Dakota wheat farmers later this summer will be harvesting an average crop with good quality. The tour estimated the average hard red spring wheat yield at 47.4 bushels per acre, a bit below the 2022 tour estimate of 49.1.

Tour is Important Tool

Wheat Quality Council Executive Vice President David Green, who organized the tour, said the event is all about providing insight and education.

“Along with calculating and estimating the crop’s potential, we also aim to educate people who are new to the industry, or even those in the industry who have not experienced this process,” said Green.

July 28, 2023/by Ralph Loos

Market and Crop Analysis, Plant Breeding Innovation, Snake River Dams, Trade Negotiations and Barriers, Wheat Industry News