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Wheat Industry News

News and Information from Around the World Wheat Industry

Speaking of Wheat

“In 2024/25, despite less acreage being planted into wheat, more favorable weather is expected to boost [wheat] area harvested and yield compared with [2023/24]. Production is forecast higher for hard red winter, hard red spring, white, and durum classes of wheat as conditions have been generally favorable. While soft red winter production is down 24% from the previous year’s bumper crop, it is forecast above the recent 5-year average.” – From “U.S. Wheat Production Estimated at Highest Level in 8 Years,” Oct. 2, USDA-Economic Research Service.

Ultra-Processed Food Study Positive on Grain Foods

Thanks to the North American Millers’ Association for sharing an editorial from Sosland Publishing highlighting a recent study published in “The Lancet” that differentiates enriched grains from other categories of ultra-processed foods. Researchers cited data linking soft drinks, processed meats, and ready-to-eat foods with a higher type 2 diabetes risk while whole grain bread “displayed inverse associations.” A higher intake of bread and cereals was associated with a lower risk of stroke and cold cereal intake was associated with lower risk of cardiovascular disease.

“Pasta is the one food I can’t live without. It’s delicious and nutritious.” – Giada De Laurentiis

Cultivating Crops to Nurture a Family Legacy

Johnsrud Family

“Eatwheat.org” was created by the Kansas Wheat Commission to share the story of America’s wheat farmers, and recently shared this story: In northwest North Dakota, Dustin Johnsrud, a fourth-generation farmer is cultivating a future for sustainable agriculture. Specializing in durum and spring wheat, along with other small grains like canola, peas and lentils, this no-till operation stands as a testament to modern farming practices that prioritize both efficiency and environmental stewardship. “I’ve always believed in minimizing our impact on the land,” Johnsrud explains. “Using no-till methods helps conserve moisture, which is vital given our semi-arid climate.”

2024 Borlaug CAST Communication Award Recipient

Congratulations to Mr. Jack Bobo, Director of the University of Nottingham’s Food Systems Institute, who is the recipient of the 2024 Borlaug CAST Communication Award (BCCA) that celebrates individuals who excel in communicating agricultural science to diverse audiences. The Council for Agricultural Science and Technology (CAST) is a nonprofit organization that assembles, interprets, and communicates credible, balanced, and science-based information about food, agriculture, natural resources, and related topics.

Support for Climate-Smart Practices Grows

USDA has released US$7.7 billion in assistance for fiscal year 2025 (Oct.- Sept.) to help agricultural and forestry producers adopt conservation practices on working lands. This includes up to $5.7 billion for climate-smart practices, made possible by the Inflation Reduction Act and $2 billion in Farm Bill funding. This is more than double the amount available last year and the most conservation assistance made available in a single year in U.S. history for popular USDA conservation programs. Read more here.

Washington Association of Wheat Growers Leader Honored

Michelle Hennings

Congratulations to Michelle Hennings, Executive Director, of the Washington Association of Wheat Growers, recipient of a 2024 Pacific Northwest Waterways Association Distinguished Service Award. Winners were selected for their significant contributions to the Northwest navigation, energy, irrigation, and recreation communities. Ms. Hennings is a leading voice advocating for preservation of navigation on the Columbia Snake River System, an essential part of the U.S. wheat export supply system.

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.

 

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Video: USW Crop Quality Report, Seminars Provide Customers With a Transparent Look at 2024 Crop

Months of Cooperation

Months of work go into U.S. Wheat Associates’ (USW) annual Crop Quality Report and the Crop Quality Seminars that follow. But when the job is done, customers of U.S. wheat around the world benefit from an effort that requires cooperation across the entire wheat industry.

The Crop Quality Report includes information on everything from production, growing conditions, kernel characteristics, milling properties and baking performance, with the aim of offering valuable insights to wheat buyers and processors.

Transparency in Focus

“We share data on the crop to ensure transparency and inform customers about the quality of the U.S. wheat crop,” explains Erica Oakley, USW Vice President of Programs who leads the Crop Quality project each year. “The report is the culmination of a long process we are able to complete by partnering with, USDA, state wheat commissions and partner laboratories.”

Starting in late October and running through November, USW and a team of experts visits two dozen countries to conduct seminars based on the Crop Quality Report, which is made available on the USW website (www.uswheat.org).

To learn more about the crop and the 2024 USW Crop Quality Report, watch the short video below . . .

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Sustainable U.S. Durum Production is Something Else to Celebrate on World Pasta Day

Whether it’s in a meal of pasta in Italy or a dinner table somewhere else in the world, farmers who grow U.S. durum play a vital role in feeding the world while preserving the land for the next generation.

Whether it’s in a meal of pasta in Italy or a dinner table somewhere else in the world, farmers who grow U.S. durum play a vital role in feeding the world while preserving the land for the next generation.

As we celebrate World Pasta Day on October 25, it’s important to recognize the producers of one of the world’s most popular foods: U.S. durum wheat farmers. Durum wheat, the key ingredient in pasta, is grown mostly in North Dakota, Montana, and the Desert Durum® regions of Arizona and California. These farmers are committed not only to producing high-quality wheat but also practicing sustainable farming techniques that protect the land, resources, and durum supplies for future generations.

A Longstanding Commitment to Sustainability

Sustainability was a cornerstone of U.S. durum farming long before it became a consumer-driven expectation. Many U.S. farmers have employed conservation tillage and crop rotation to improve soil health and conserve water. For example, in Arizona, Desert Durum® farmers have found that rotating wheat with crops like lettuce can reduce irrigation water usage by nearly 30%. Additionally, no-till farming practices have increased significantly, with farmers reporting the use of no-till methods on 45% of wheat acres in 2017, up from just 20% in 2004.

This commitment is reflected in the substantial participation of U.S. wheat producers in USDA conservation programs. Between 2018 and 2021, U.S. wheat producers entered into over 7,500 contracts through Farm Bill programs that promote cover crops, erosion control, and reduced tillage – vital practices that help ensure the long-term viability of their land and crops.

Mark Birdsall, Vice Chairman of the North Dakota Wheat Commission, harvests wheat on his farm near Berthold, North Dakota. Birdsall grows durum and hard red spring wheat.

Mark Birdsall, Vice Chairman of the North Dakota Wheat Commission, harvests wheat on his farm near Berthold, North Dakota. Birdsall grows durum and hard red spring wheat.

“The generational nature of farming also drives our sustainable efforts,” said Mark Birdsall, vice-chairman of the North Dakota Wheat Commission. “I have kids farming. I have grandkids that are going to farm, and they’re going to have kids who are going to farm, too. Anything I can do to generate better soil health and a structure that will maintain this farm for years and years to come, long after I’m gone, I guess, is what I would consider beneficial to everyone.”

Durum Wheat’s Role in a Changing Market

In recent years, the world’s consumers have become more environmentally conscious, placing greater emphasis on how their food is grown.

Durum wheat, the key ingredient in pasta, is grown mostly in North Dakota, Montana, and the Desert Durum® regions of Arizona and California.

Durum wheat, the key ingredient in pasta, is grown mostly in North Dakota, Montana, and the Desert Durum® regions of Arizona and California.

Research from U.S. universities and global studies, such as PwC’s “Voice of the Consumer” survey, indicate that a significant number of shoppers are willing to pay more for sustainably produced food, particularly when producers are transparent about their methods. This demand aligns perfectly with the practices already employed by U.S. durum farmers and their commitment to continuous production improvement.

“We’re increasingly aware that consumers are becoming more interested in where their food comes from. We see the relationship between producers, processors, and consumers growing closer. In the long run, I believe this is a win-win situation,” said Birdsall.

This combination of quality and responsible farming has helped U.S. durum wheat stand out in the global marketplace. Whether it’s in a meal of pasta in Italy or a dinner table in the United States, U.S. durum and the families who produce it play a vital role in feeding the world while preserving the land for the next generation.   

                                                                              – Article by Jesse Harding Campbell

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Key Market Mover: Concern About Dry Conditions Continues to Drive Markets

As the Northern Hemisphere harvest concludes and crops in the Southern Hemisphere near maturation, wheat markets are still highly sensitive to weather-related news. As headlines about dry conditions around the globe come and go, and markets fluctuate daily, having information about the current drought conditions worldwide and potential impacts remains important to wheat buyers.

Southern Hemisphere

At this stage in the Southern Hemisphere, weather conditions become crucial for determining yield potential.

In September, persistent dryness in Western Australia prompted the state’s grain industry association to reduce the region’s output by 7% to 9.3 million metric tons (MMT), while late-season frost had detrimental effects across southeast Australia. In response, private analysts lowered their total Australian production estimates to between 27 MMT and 29 MMT. Despite the decrease, current projections still align with the five-year average of 29.8 MMT. Likewise, estimates from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) and the October World Agricultual Supply and Demand Estimates (WASDE) held their forecasts steady at 31.9 MMT and 32 MMT, respectively.

Map of Australia indicating rainfall measurements across the country.

After a period of dry conditions, private analysts decreased their Australian wheat production estimates to between 27 and 29 MMT. Despite the decrease, current projections align with the five-year average of 29.8 MMT and ABARES estimates remain unchanged at 31.8 MMT. Source: ABARES.

Similarly, in Argentina, a recent update from the Rosario Grains Exchange decreased Argentinian wheat production 1.0 MMT to 19.5 MMT, as key farming areas remain dry. Even so, the October WASDE kept Argentinian production at 18 MMT, a 2.2 MMT bump from the year prior and a 42% increase from the 2022/23 drought.

Northern Hemisphere

In the Northern Hemisphere, harvest is complete and the 2024 crop is in the bin. However, recent dry conditions in Russia and the United States, along with a recent history of drought conditions, have begun to raise some concerns about potential planted area.

Following the drought in 2024/25 that cut Russian wheat production by 10% to 82.0 MMT, dryness lingers. SovEcon reported that poor weather in key growing regions has reduced Russian winter grains planting to 8.3 million hectares (20.5 million acres), down from 9.3 million hectares (22.9 million acres) last year, marking the lowest level since 2013. This reduction in planted area could negatively affect the 2025/26 harvest; however, it is too early to make definitive assessments. Furthermore, a forecast for rain may provide short-term relief across Russia.

Turning to the domestic front, dry conditions have dominated discussions; however, U.S. conditions remain much improved compared to the devastating drought from 2021 to 2023. As expected, the USDA Small Grains Summary put final 2024/25 U.S. wheat production at 53.6 MMT, a 9% increase year over year, on improved growing conditions. For all classes, yields sit at 51.2 bu/acre, the highest level since 2019, while hard red spring (HRS) yields came in at 52.5 bu/acre, the highest on record.

Table of U.S. wheat production by class over three years

The USDA Small Grains Summary put final 2024/25 U.S. wheat production at 53.6 MMT, a 9% increase year over year, on improved growing conditions. Source: USDA Small Grain Summary.

Planting Progress

Looking ahead, planting progress is on track with 64% of the crop planted; however, additional moisture will be necessary to promote emergence before dormancy. According to the USDA Drought Monitor, 47% of winter wheat regions are currently experiencing drought, a decrease from 49% last year and a substantial drop from the peak of 66% in 2022. Similarly, only 29% of spring wheat is in drought-affected areas, down from 51% last year and significantly lower than the peak of 98% in October 2021.

Image of deficit rainfall in the United States

According to the USDA Drought Monitor, 47% of winter wheat regions are currently experiencing drought, a decrease from 49% last year and a substantial drop from the peak of 66% in 2022. Only 29% of spring wheat is in drought-affected areas, down from 51% last year and significantly lower than the peak of 98% in October 2021. Source: National Drought Mitigation Center.

Despite the significant media coverage of drought and dryness, long-term effects have not yet been observed in current data. Production in Australia and Argentina remains steady and in line with long-term averages, while more insights are expected once harvest campaigns begin. Likewise, it is premature to draw any conclusions about the newly planted 2025/26 winter wheat crop. As farmers know all too well, only Mother Nature has the power to alter the narrative.

See the latest detailed World Supply and Demand information from U.S. Wheat Associates (USW) here.

By USW Market Analyst Tyllor Ledford

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First Look: New Crop Soft White Production is Up; Functionality is Good

The larger 2024 Pacific Northwest (PNW) soft white (SW) crop experienced more moisture and moderate temperatures, resulting in typical protein distribution, appropriately weak to medium gluten strength, and acceptable to good functionality. The high protein segment is a blending opportunity for crackers, Asian noodles, steamed breads, flat breads, and pan breads. The Club wheat subclass, with very weak gluten strength, is typically used in a Western White blend with SW for cakes and delicate pastries.

Kernels of soft white wheat used as flour in cakes, cookies and pastries on a white background.

From specialty products such as sponge cakes or Asian noodles to blending with HRS for improving bread color, U.S. soft white (SW) wheat flour has the versatility to improve the quality of a wide variety of products. It has a low protein of 8.5% to 10.5% (12% mb), low moisture and weak gluten. SW includes winter and spring varieties increasing the protein range and functionality within the class.

Growing Conditions

Ample moisture at seeding helped establish the winter SW crop with  winter moisture and mild temperatures supporting crop growth after dormancy and also supporting spring SW. Those conditions transitioned to a prolonged hot, dry period that stressed spring-seeded crops and accelerated maturity. Yields were average to above average with total 2024 PNW SW production reaching 6.7 million metric tons, 17% more than the 2023 crop.

2024 Highlights

  • Average grade for SW and Club is U.S. No. 1.
  • Test weight averages for SW trended higher this year with all protein composites above 60 lb/bu (78.9 kg/hl). Club test weight was comparable to last year.
  • Wheat protein (12% mb) is lower than last year but within a normal range for SW and Club.
  • Wheat falling number average is greater than 300 sec and comparable to 2023 and the 5-year average for SW and Club.
  • Buhler Laboratory Mill straight grade extractions, L* values (whiteness), and FLOUR ASH are similar to last year for SW. Club straight grade flour extraction and flour ash are down slightly this year with an L* value similar to last year. Damaged starch trended higher than last year for both SW and Club, due to slightly harder kernels. Flour extraction calculation has shifted from a total weight basis to a tempered weight basis and should not be compared to the 5-year average. Commercial mills should see better extractions.
  • Wet gluten contents for SW flour are lower this year compared to 2023 and the 5-year average. This likely reflects higher yields and mild temperatures.
  • Solvent Retention Capacity (SRC) lactic acid values for SW are in a normal range for weak to medium gluten strength. Water SRC values are up slightly compared to last year but are comparable to the 5-year average for SW. Overall, SW composites have SRC profiles suitable for good cookie and cracker performance. Lactic acid and water SRC values for Club are consistent with very weak gluten with low water holding capacity.

    The Rapid Visco Analyser is a tool that measures starch pasting quality for cakes, breads, batters, pasta and noodles.

    Rapid Visco Analyser

  • Starch pasting properties as shown by amylograph and RVA viscosities for SW and Club indicate the crop is suitable for batter-based products. The overall SW and Club averages are similar to last year’s and the 5-year average.
  • SW and Club show typical dough properties ranging from very weak to medium gluten strength and low water absorption values similar to their respective 2023 and 5-year averages.
  • Sponge cake volumes for SW are similar to 2023 and the 5-year average with softer textures than last year (lower hardness). Club sponge cake volume is slightly smaller than last year and the 5-year average with softer texture. Testers baked cakes with an experimentally milled straight grade flour. For comparison, control cakes baked at the same time from a commercially milled short patent cake flour have an average volume of 1132 cc and an average firmness of 273 g.
  • Average SW and Club cookie diameters and spread ratios are significantly larger than last year. These values should not be compared to the 5-year averages as the cookie method has changed as of 2023.
  • Average SW pan bread bake absorptions are in a normal range with specific loaf volumes and scores that trend with protein content and bake absorption. Blends of hard wheat with up to 20% SW should produce acceptable pan breads, especially at the higher end of the SW protein spectrum.
  • Chinese southern-type steamed bread specific volumes for SW and Club are similar to last year and larger than the 5-year average. Product appearance, especially external, was better than last year for both SW and Club.
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First Look: Larger Hard Red Winter Wheat Crop Offers More Consistent Quality

Continuous varietal improvement and improved growing conditions following a multiple year drought helped Central and Southern Plains farmers produce a more familiar, well-balanced hard red winter (HRW) wheat crop for 2024. A wider range of conditions in the Pacific Northwest (PNW) HRW crop encouraged higher yields with lower, but highly functional, protein levels. Both supplies meet or exceed typical HRW contract specifications and should provide high value to customers.

Hard red winter wheat kernels on a white background.

With excellent milling and baking characteristics for pan breads, hard rolls, croissants and flat breads, U.S. HRW is also an ideal choice for some types of Asian noodles, general purpose flour, and as an improver for blending. It has medium to high protein, medium hard endosperm, red bran, medium gluten content and mellow gluten.

U.S. farmers planted an estimated 24.1 million acres (9.8 million hectares) in fall 2023, marking a 4% increase over the previous year. USDA estimates total production of 21.0 MMT. That is up 28% from last year and contributed to the largest crop of all U.S. wheat classes in eight growing seasons. Here are the initial details and information about California’s HRW crop that USW will share with importing customers in the 2024 U.S. Wheat Crop Quality Report and Seminars. Plains Grains will offer even more local information soon.

2024 HRW Highlights

Average Grade for both the Gulf-exportable and PNW-exportable crops is U.S. No. 1 HRW. This indicates that both crops meet the highest quality standards for hard red winter wheat.

Test Weight for the Gulf-exportable crop is higher than last year and the 5-year average, indicating a sound crop. For the PNW-exportable crop, the test weight is significantly higher than last year, reflecting dense and heavy kernels.

Wheat Moisture levels for both the Gulf and PNW crops are lower than last year, which is a result of drier harvest conditions.

Wheat Protein (12% mb) content for the Gulf-exportable crop is lower compared to last year and the 5-year average, which is due to less stress and higher yields. The PNW-exportable crop also has slightly lower protein content compared to last year.

1000 Kernel Weight for the Gulf-exportable crop is lower than last year and the 5-year average, reflecting smaller kernels due to early season dryness. In contrast, the PNW-exportable crop has a higher 1000 kernel weight than last year and the 5-year average.

Kernel Characteristics: The Gulf-exportable crop has slightly smaller kernels due to early season dryness but higher test weights due to ideal conditions during grain filling. The PNW crop has slightly softer, heavier, and larger kernels compared to last year and the 5-year average.

Wheat Falling Number for the Gulf-exportable crop is notably higher than last year and the 5-year average, indicating a sound crop. For the PNW-exportable crop, the falling number is lower than last year and the 5-year average but still well above industry standards.

Tandem Laboratory Mill average for the Gulf-exportable crop is lower than last year, which should result in better extractions for commercial mills. The PNW-exportable crop also has a lower tandem laboratory mill average than last year, due to humidity levels and moisture loss at milling.

Image shows a laboratory worker viewing a computer screen with a graph from a farinograph test of wheat.

Farinograph Values for the Gulf-exportable crop indicate a similar peak time, slightly longer stability, and similar absorption compared to last year. The PNW-exportable crop has similar peak time, slightly shorter stability, and similar absorption compared to last year.

Extensograph Values for both the Gulf and PNW crops indicate similar or greater extensibility compared to last year, suggesting a more balanced gluten profile.

Dough Properties for both the Gulf and PNW crops demonstrate typical dough mixing properties and water absorptions with more balanced gluten properties that are adjustable with formula or blend modifications.

Loaf Volume and Bake Absorption values for both the Gulf and PNW crops are lower than previous high protein years but are appropriate for this year’s protein content.

California Report

The majority of California’s 2024 HRW crop has medium protein. Consistent with other years, the crop has low moisture, high flour extraction and strong baking performance — all of which make California wheat suitable for blending. The overall grade sample average for the 2024 HRW harvest survey is U.S. No. 1 HRW.

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Wheat Industry News

News and Information from Around the World Wheat Industry

Speaking of Wheat

“If I am worth anything later, I am worth something now. For wheat is wheat, even if people think it is a grass in the beginning.” – Painter Vincent van Gogh. Above, Wheatfield with Crows, 1890, Van Gogh Museum, Amsterdam.

USW Featured on “Wheat’s on Your Mind” Podcast

Vice President of Policy Dalton Henry and Director of Trade Policy Peter Laudeman discussed the implications of the HB4 drought-tolerant GM trait that USDA deregulated on Aug. 29 on the Kansas Wheat podcast “Wheat’s on Your Mind.” Discussion included, does the trait work? What are the implications for international trade? And when will HB4 wheat be grown in the United States? Listen here, or on other podcast sources.

USW's Dalton Henry and Peter Laudeman participated in the "Wheat's On Your Mind" podcast

USW’s Dalton Henry and Peter Laudeman participated in the “Wheat’s On Your Mind” podcast

Texas Wheat Leadership Transition          

The Texas Wheat Producers Board and Association announced the appointment of Steelee Fischbacher as its Executive Director, effective Sept. 5, 2024. With over 15 years of experience with Texas Wheat, Fischbacher is well-positioned to lead the organization. Rodney Mosier, Texas Wheat Executive Vice President since 1998, was named Executive Vice President Emeritus and plans to retire in March 2025. Read more here.

Steelee Fischbacher

Steelee Fischbacher is the new Executive Director of Texas Wheat Producers Board and Association

Innovation in Breeding Will Boost Food Security

More than 90% of seed sector insiders surveyed by the International Seed Foundation expected innovations that breed more resilient and productive varieties of key crops within two decades. Such developments would bolster global food security in the face of the growing impacts of climate change, which was cited as the greatest challenge facing the sector by almost 45% of respondents. The survey was conducted to help inform several upcoming food and agriculture conferences. Read more here.

Wheat Improvement Drives Researcher

Dr. Jessica Rutkoski is the first wheat breeder to hold the Siemer Milling Company Professorship at the University of Illinois Urbana-Champaign. Her career and background on the $1 million gift from Siemer Milling Company, Teutopolis, Ill., are featured in a recent article by Jeannine Otto in AgriNews. Illinois is the leading soft red winter wheat producing state. “I really love interacting with people in the wheat industry,” Rutkoski said. “It is always enjoyable to talk to the stakeholders and anyone who is involved in wheat production.” Read more here.

Dr. Jessica Rutkoski, assistant professor of small grains breeding at the University of Illinois, is the first wheat breeder to hold the Siemer Milling Company Professorship at the school.

Dr. Jessica Rutkoski, assistant professor of small grains breeding at the University of Illinois, is the first wheat breeder to hold the Siemer Milling Company Professorship at the school.

In Montana, This Wheat Field Is Art

An acre of wheat designed by the artist Agnes Denes has cropped up at a new exhibition space in Montana, where agriculture is rapidly giving way to development. This revelation is a testament to a new artwork by Agnes Denes in the burgeoning mountain micropolis of Bozeman, Mont. Titled “Wheatfield — An Inspiration. The seed is in the ground,” the project hinges on an acre of wheat planted at Tinworks Art, a fledgling exhibition space in a demolished beer factory. Read more here.

Felty: Producers Face Real Consequences if Congress Fails to Pass a Farm Bill

In an opinion piece for Agri-Pulse, National Association of Wheat Growers (NAWG) President Keeff Felty urged members of Congress on both sides of the aisle to come together and pass a bipartisan farm bill this year that strengthens the farm safety net. “Over the course of the last farm bill, wheat growers have experienced a wide range of challenges, from drought, market volatility, trade disruptions, and supply chain disruptions. By investing in crop insurance and the commodity title, lawmakers can help make these programs more effective, efficient, and responsive to natural disasters and market challenges that are outside of producers’ control. Read more here.

OSU Wheat Variety Update Includes Advice for Next Year’s Crop

Oklahoma State’s chief wheat geneticist Brett Carver appeared at several producer meetings, including serving as keynote speaker at the Oklahoma Wheat Growers Association annual meeting in Enid, where he gave a recap of research results from the past year and discussed future plans for the breeding program. Read more here.

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.

 

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Price Perspectives: A Bounce from Four-Year Lows

On August 26, 2024, CBOT, KBOT, and MGEX wheat futures prices declined to four-year lows, pressured by the Northern Hemisphere harvest, adequate supplies in aggressive exporters, and generally low prices for feed grains and oilseeds.

Since then, futures prices sustained a multi-week rally, fueled by a weakening dollar, technical short covering from speculative funds, and a recent escalation in the Russia-Ukraine war. However, the question remains: has market sentiment shifted into a bullish market, or will the bearish trend hold? The following describes the current market factors and fundamentals influencing price trends.

Change in world wheat production in 2024 compared to 2023.

Despite a cumulative 20.5 MMT drop in wheat production from the EU, Russia, and Ukraine, the September WASDE reported that the total output for major exporters was just 1% lower than the previous year and 1% below the five-year average. Source: September 2024 WASDE.

Supply and Demand

Despite a cumulative 20.5 MMT drop in wheat production from the EU, Russia, and Ukraine, according to the September World Agricultural Supply and Demand Estimates (WASDE), the total output for major exporters was just 1% lower than last year and 1% below the five-year average. Moreover, total world wheat output sits at a record 796.8 MMT as increased production forecasts from the U.S., Australia, Canada, India, and China balanced the declines.

As the northern harvest wraps up and harvest related price pressure eases, markets will closely monitor the Southern Hemisphere, especially with another possible La Niña weather event. The September WASDE raised Australian production estimates by 2.0 MMT to 32.0 MMT on beneficial weather, while Argentinian estimates sit at 18.0 MMT, a 14% increase from last year.

Meanwhile, world wheat imports are down 12.0 MMT year over year as major importers buy less. Most notably, Turkish imports are down 2.4 MMT from last year, after Türkiye temporarily banned wheat imports to protect their domestic market.

Despite the overall lackluster import forecast, world wheat consumption continues to outpace production by 8.0 MMT. Likewise, ending stocks in major exporting countries sit at 51.6 MMT, 9% below the five-year average and 29% below the recent high in 2016/17.

Bar chart with text

Major exporting countries hold ending stocks of 51.6 MMT, which is 9% below the five-year average and 29% below the recent high in 2016/17, indicating a tight underlying balance sheet. Source: USDA PSD.

Macro-Level Influences

In addition to basic supply and demand factors, broader influences on price such as interest rates, dollar strength, and risk premiums have bolstered wheat markets in recent weeks.

On September 18, the Federal Reserve cut its U.S. dollar interest rate by 50 basis points, the first cut in 4 years and the dollar has weakened in response to this change. While a weaker dollar has long-term benefits, such as making U.S. exports more competitive, it typically supports prices short-term as markets adjust. Lower interest rates also affect storage costs and calendar spreads for wheat futures moving forward.

Line chart with text

The interest rate cut at the September Federal Reserve meeting causes the dollar to weaken. The weaker dollar boosts competitiveness by making U.S. currency cheaper for importers. Source: ProphetX.

Looking at risk premiums, renewed attention on the Russia-Ukraine war also helped support the recent rally. On September 12, Ukraine reported that a Russian missile struck a cargo ship transporting wheat to Egypt. If verified, this strike would mark the first attack on a grain vessel in open water and escalate tensions in the Black Sea. In response to the attack allegations, CBOT, KBOT, and MGEX wheat futures jumped an average of 14 cents. Speculative funds engaging in short covering have also intensified the upward pressure on markets, as investors look to benefit from the current rally.

What’s Next

With the market breaking from the downward trend, supply and demand fundamentals will establish long-term direction. Overall, despite the underlying low stocks in the global balance sheet, adequate wheat supplies and sluggish demand weigh on prices, seeming to reinforce bearish market sentiment.

However, in the short term, Federal Reserve policy decisions will affect interest rates and competitiveness, while the easing of harvest related price pressure and a renewed war risk premium suggest a potential for further gains.

By Tyllor Ledford, USW Market Analyst

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First Look: Another High-Quality Soft Red Winter Wheat Crop

In its first detailed report on U.S. wheat quality in 2024, U.S. Wheat Associates (USW) is pleased to report that farmers growing soft red winter (SRW) wheat weathered some challenging conditions to produce another high-quality crop for domestic and overseas customers.

The 2024 SRW crop benefitted from excellent winter moisture followed by mid-season drought and heat that reduced test weight and yield potential. Yet the crop exhibits good milling characteristics and is relatively free of higher DON. Processors are seeing a versatile crop with good qualities for cookies and crackers. Higher protein and good extensibility should help add value in blending for baking applications.

The full USW Soft Red Winter Quality Survey is available online here. Buyers are encouraged to review their quality specifications to ensure that purchases meet their expectations.

 

Soft red winter wheat kernels against a white background.

Milling and baking industries use soft red winter wheat for specialty products such as cookies (biscuits), crackers, snack foods, and cake flour. SRW is a versatile wheat for blending with U.S. hard red spring (HRS) and hard red winter (HRW) wheat to lower grist cost and improve bread crumb texture, or to improve the quality and appearance of a wide variety of products.

How the Season Progressed

SRW planting started in mid-September 2023 and stayed mostly on a normal pace. USDA estimates seeded area at a total of 6.14 million acres (2.48 million hectares). That is down 24% compared to the 2023 crop but up 4% over the 5-year average.

Warm, wet conditions prevailed across the eastern U.S. through the winter and into the spring. Even with pockets of adverse weather, there was limited disease pressure. After harvest started in mid-May, wet weather followed into early June until heat and dryness set in to speed up harvest. There were some rain delays at harvest in areas feeding into the Gulf export tributaries.

With lower seeded-area buffered by good growing conditions, farmers produced just under 342 million bushels, or 9.3 million metric tons (MMT) of soft red winter wheat, and beat the 9.0 MMT 5-year average.

Image shows a U.S. map suggesting where soft red winter wheat is grown and where samples were collected for the 2024 survey.

2024 Crop Highlights

The overall grade sample average for the 2024 SRW harvest survey is U.S. No. 2 SRW.

Test weight averages trended lower this year and likely reflect mid-season heat and dryness.

Wheat protein (12% mb) averages are higher compared to last year’s crop and the 5-year average. The higher SRW protein content reflects expanding drought during the growing season.

The wheat falling number average for the East Coast is notably higher than last year and 5-year average due to better harvest conditions. The Gulf average is lower than last year but in line with the 5-year average, reflecting isolated wet weather during harvest. This year’s overall average soft red winter wheat falling number of 326 seconds indicates a sound crop.

Vomitoxin (DON) averages are higher than last year, but still below the USDA threshold of 2.0 ppm, indicating the sampled crop is relatively free of DON.

Single kernel values reflect that this year’s crop is lighter and has slightly smaller diameters than last year, but similar to the 5-year average. Compared to last year, the East Coast kernels are softer, and Gulf kernels are similar.

Amylograph viscosity indicates starch characteristics that are suitable for batter-based products. The Overall and Gulf values are lower than average. The East Coast value is significantly higher than average and reinforces the higher falling numbers and lower amylase activity compared to last year.

Solvent Retention Capacity (SRC) values for this crop indicate excellent quality for all typical applications. Sucrose values indicate cookies and crackers will benefit from reduced bake time and should not experience any excess water-holding issues.

Dough properties suggest this crop is in a similar range of values compared to last year and the 5-year average and typical for SRW.

USW photo of technician conducting a cookie spread test for soft wheat.Cookie spread factor values indicate the crop has acceptable spreadability (diameter to height ratio). The Gulf values are lower compared to last year and 5-year average but should be resolvable with minor formulation adjustments. The East Coast values are the same as last year and similar to the 5-year average.

Loaf volume averages are higher than last year and similar to 5-year averages, reflecting the higher protein and greater extensibility of this year’s crop, and also indicates suitability for blending.

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Producing the Story of the Reliable System that Transports Wheat from the U.S. Plains to Customers Around the World

Farmers at Heart of the Story

The wheat was still green and had only recently headed when a film crew showed up on Derek Sawyer’s Kansas farm this spring. Weeks later, in summer, the same crew set cameras up on the edge of a golden Nebraska wheat field to capture harvest by Kent Lorens.

Though their 2024 crops were at very different stages, both farmers shared similar sentiments: “What we do here is only a part of the story.”

That story – how a reliable system of trucks, trains and ships moves U.S. wheat from farm field to grain elevator to shipping port and finally on to customers around the world – is being told by U.S. Wheat Associates (USW) in a new video project now in production.

Kent Lorens and one of his sons work together to harvest the 2024 wheat crop in Stratton, Nebraska. Lorens is one of the farmers who helps tell the story of how a reliable system of trucks, trains and ships moves U.S. wheat from farm field to grain elevator to shipping port and finally on to customers around the world.

Kent Lorens and his family work together to harvest the 2024 wheat crop in Stratton, Nebraska. Lorens is one of the farmers who helps USW tell the story of how a reliable system of trucks, trains and ships moves U.S. wheat from farm field to grain elevator to shipping port – and finally on to customers around the world.

From Field to Gulf to Customer

Specifically, the story follows wheat grown in the Plains states and exported through the Texas Gulf. It highlights the fact that, no matter where they are located around the globe, customers count on the U.S. as the world’s most reliable supplier of high-quality wheat. In one segment of the project, a top international buyer of U.S. wheat appears in his company’s flour mill to emphasize the importance of sourcing the class of U.S. wheat that is needed – when it is needed. Appearing on their respective farms, Sawyer and Lorens discuss the care they take to sustainably grow high-quality wheat and explain how they value their customers. And how they also value the supply chain that delivers their wheat.

A USW film crew spent a spring day on the farm of Derek Sawyer in McPherson, Kansas to learn how his family works to grow a high-quality wheat crop each year. Sawyer also explained how U.S. farmers value their customers, as well as the supply chain that delivers their wheat.

A USW film crew spent a spring day on the farm of Derek Sawyer in McPherson, Kansas to learn how his family works to grow a high-quality wheat crop each year. Sawyer also explained how U.S. farmers value their customers, as well as the supply chain that delivers their wheat.

Many Factions Working Together

Local grain elevators across the Plains and the rail system that connects them to export facilities is also highlighted.

To capture the final chapter of the story, USW was in Houston in early September to oversee filming at an export elevator. While 110-car unit trains filled with wheat from the Plains unloaded on one end of the facility, two large bulk carrier ships were being loaded in an adjacent shipping canal. When filled with U.S. with hard red winter (HRW) wheat, those ships were headed for Africa and South America.

In early September, USW traveled to Houston to film the unloading of trains filled with wheat from the Plains states and the subsequent loading of bulk carrier ships that deliver high-quality U.S. wheat to customers around the world.

In early September, USW traveled to Houston to film the unloading of trains filled with wheat from the Plains states and the subsequent loading of bulk carrier ships that deliver high-quality U.S. wheat to customers around the world.

USW Plays Important Role

As an important part of its trade service support, USW works directly with overseas buyers to answer questions and resolve issues in purchasing, shipping, or using U.S. wheat. USW does this through regional and country offices, trade delegations to the United States, regular crop and market condition updates, quality surveys and other activities. The organization looks forward to sharing this video story of U.S. wheat reliability and quality that provides such excellent value to the world’s wheat buyers.

 

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