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Sharing a Way of Life: U.S. Wheat Farmers Invest Hard Work and Purpose in their Crops

Over the past few months, Wheat Letter has shared the story of the U.S. wheat supply chain. We started with the public and private wheat breeders who help protect wheat crops from extreme conditions while improving performance qualities. We discussed how U.S. wheat farmers carefully select the best wheat varieties to plant on their land, then care for the crop in more sustainable ways. And we demonstrated how grain handlers and exporters maintain wheat quality for their customers.

Behind this impressive industry, there are people who bring passion and purpose – intangible investments that go into every step of the field to export journey. As U.S. Wheat Associates (USW) says in its film, “Wholesome: The Journey of U.S. Wheat,” while the process makes U.S. wheat the world’s most reliable supply, the people make the wheat whole.

“I cannot imagine not doing this work,” said USW Chairman and Grass Valley, Ore., farmer Darren Padget. “We were born and bred to do it.”

Darren’s son and farming partner Logan agreed.

“I feel like what we do out here is very good. We raise some of the best quality wheat in the world and I am proud to be a part of it,” he said.

Jeremy Goyings, a fifth-generation farmer from Paulding, Ohio, sees intangible value in his work that U.S. wheat buyers around the world will appreciate.

“The reward is knowing that the things we have changed, the things that we do differently day-in and day-out means someone gets better quality food in the end,” said Goyings.

Wheat Letter invites you to learn more about how the ordinary people who grow U.S. wheat see great responsibility and reward in their work.

In October, November and December, Wheat Letter will continue focus on the unique end-product qualities and value of the six wheat classes these U.S. wheat farmers produce.

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2021 Hard Red Spring Crop Boasts Excellent Qualities and Soundness

The U.S. 2021 Hard Red Spring (HRS) crop endured significant drought conditions, leading to a sharp yield reduction and increased abandonment. Despite the moisture stressed growing season, the quality parameters of the crop are very good, with high protein content, high vitreous levels, low kernel moisture and sound kernels. Buyers will be pleased with this year’s improved dough strength and higher absorption values. With reduced supply and isolated areas with higher levels of shrunken and broken and lighter 1000 kernel weights, buyers should always remain diligent in their contract specifications.

2021 map of 2021 hard red spring wheat production and sampling

Weather and Harvest

Limited moisture allowed for fast planting, but cool temperatures or overly dry topsoil delayed emergence in parts of the growing region. Above-average temperatures, minimal precipitation and high winds stressed a significant share of the crop. A dry, rapid harvest period limited disease pressures and benefitted kernel quality parameters. USDA estimates production at 8.1 million metric tons, 44% below last year.

2021 Crop Highlights

  • Grade – the overall average is U.S. No. 1 Dark Northern Spring (DNS).
  • Test Weight averages 61.3 lb/bu (80.6 kg/hl), slightly lower than the 2020 and 5-year averages.
  • Vitreous Kernel Levels (DHV) improved, averaging 80% compared to 71% in 2020.
  • Protein averages 15.4% (12% mb), above 2020 and 5-year averages.
  • DON levels were near zero due to minimal disease pressures.
  • 1000 Kernel Weight average is 29 g, below 2020 and 5-year averages.
  • Falling Number average is 377 sec, benefited by a rapid, dry harvest.
  • Wet Gluten averages 37.4%, notably higher than 2020 and 5-year averages, supported by high kernel protein content.
  • Amylograph values average 732 BU for 65 g of flour, up notably from recent levels.
  • Farinograph testing indicates a much stronger crop than in recent years, with an average stability of 18.8 min.
  • Alveograph and Extensograph analyses show greater resistance and less extensibility.
  • Loaf Volume average is 952 cc, lower than 2020 and 5-year averages.
  • Bake Absorption average is 66.4%, down from 2020 but similar to the 5-year average.
  • Bread Scores are higher than 2020 and 5-year averages.

U.S. Wheat Associates (USW) has posted more about the 2021 hard red spring crop here and the full regional report here.

2021 Crop Quality Data on Other U.S. Wheat Classes

Hard Red Winter
Soft Red Winter
Soft White
Northern Durum
Desert Durum® And California Hard Red Winter
Hard White

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2021 Northern Durum Wheat Crop is High Quality with Excellent Performance

Buyers will find the 2021 Northern durum crop to be of high quality, especially for grading and kernel characteristics. Although lower than previous years, test weights are stronger than expected, and damage is low. There is no shortage of protein in this year’s crop, and falling number values indicate a sound crop. Lower 1000 kernel weights and a reduction in the percentage of large-sized kernels will likely reduce milling yields. Dough properties look to be strong as well as cooked pasta characteristics. The main issue buyers will face is lower supply levels. Customers should also continue to be diligent in contract specifications, given that a small portion of the crop did see some rainfall at harvest.

U.S. Wheat Associates (USW) has posted the full 2021 Northern Durum Wheat Quality Report here.

2021 U.S. durum sampling data

Weather and Harvest

In the U.S. Northern Plains, Durum production is down by more than 50% from 2020 due to a small decline in acreage and sharply lower yields caused by severe drought. Throughout the growing season, overly dry soil conditions were a concern, and the dry conditions pushed crop development ahead of normal but kept disease pressures minimal. Most of the harvest was completed under dry conditions, allowing for excellent grading and kernel characteristics. Scattered rain delays toward the end of harvest affected some quality factors but did not significantly impact overall quality.

2021 Crop Highlights

  • Grade – the overall average is U.S. No. 1 Hard Amber Durum (HAD).
  • Test Weight averages 60.5 lb/bu (78.8 kg/hl), below last year and five-year averages, due to drought pressure.
  • Damage was quite low at 0.1% due to minimal disease pressure.
  • Vitreous Kernel (Hvac) content is 86%, similar to last year and 5-year averages due to drought conditions.
  • Protein averages 15.5% (12% mb), higher than 2020; nearly 90% of the crop has a minimum protein of 14%.
  • 1000 Kernel Weight average is 41.2 g, a drop from last year’s high value of 46.7 and slightly below the 5-year average of 42.1, due to dry conditions during kernel fill.
  • Kernel Moisture was lower than average due to a mostly dry harvest period.
  • Falling Number values are high, with the average for the region being 428 sec.
  • Don is nearly non-existent in this year’s crop due to very minimal disease pressure.
  • Speck Counts are lower than last year and 5-year averages.
  • Semolina Protein is 14.2%, much higher than last year due to higher kernel protein.
  • Semolina Color values are similar to last year, with brightness and yellowness slightly lower.
  • Mixing Properties reveal a stronger crop than last year and the 5-year average.
  • Cooked Spaghetti Evaluations show color similar to the 5-year average and higher cooked weight and firmness. Cooking loss is higher than last year.

Read more about the 2021 Northern Durum wheat crop here.

2021 Crop Quality Data on Other U.S. Wheat Classes

Soft White
Hard Red Winter
Hard Red Spring
Soft Red Winter
Desert Durum® And California Hard Red Winter
Hard White

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2021 Soft White Wheat Crop Faced Challenging Growing Conditions

The Pacific Northwest (PNW) experienced challenging drought conditions in the 2021 soft white crop year, resulting in a wheat crop with higher protein and lower yields. This year’s SW crop has weak to medium gluten strength and acceptable finished product characteristics. SW is especially suited for use in cakes, pastries, cookies and snack foods. The high protein segment of the SW crop provides opportunities in blends for crackers, Asian noodles, steamed breads, flatbreads and pan breads. With very weak gluten strength, Club White is typically used in a Western White blend with SW for cakes and delicate pastries.

2021 U.S. soft white sampling data

Weather and Harvest

Winter planting conditions were generally good, including sufficient moisture overall to develop a strong stand; however, less winter moisture impacted crop development coming out of dormancy. Spring planting conditions were poor due to the very dry conditions and excessive heat throughout much of the PNW.

As the crop developed, extreme sustained heat in late June accelerated crop maturity in many areas, which put the harvest timeframe generally ahead of average. Production of the 2021 PNW SW crop is estimated at 4.3 MMT, the lowest for the region since 1966.

Buyers are encouraged to review their quality specifications to ensure that their purchases meet their expectations. This will be a good year to understand SW protein performance versus protein levels; your local U.S. Wheat Associates (USW) representative can help.

2021 Crop Highlights:

  • Grade – the overall averages are U.S. No. 2 Soft White and U.S. No. 1 White Club.
  • Test Weight averages are 59.3 lb/bu for SW and 59.7 lb/bu for WC.
  • Wheat Protein (12% mb) ranges from 8.1 to 11.9% for SW, with the weighted average 11.3%. Club averages 11.5%.
  • Wheat Moisture ranges from 8.7 to 9.7% for SW with a weighted average of 8.8%. Club averages 8.0%.
  • Wheat Falling Number average is 319 sec or higher for all SW composites and 345 sec for Club.
  • Wet Gluten contents for SW flour range from 8.4 to 24.5%, depending on flour protein content. Club averages 6.1%.
  • SRC lactic acid values range 91 to 109% for SW, indicating weak to medium gluten strength.
  • Amylograph peak viscosities for SW are between 472 and 542 BU for all composites. Club averages on amylograph peak viscosity of 529 BU.
  • Farinograph SW absorptions range from 51.5 to 53.1% with 2.2 to 2.6 min stability times, showing desirable weak dough characteristics. Average Club farinograph absorption is 51.1% with a stability of 1.1 min, showing very weak dough characteristics typical for Club.
  • Extensograph SW data at 45 min show maximum resistance in the range of 174 to 284 BU, extensibility 16.8 to 18.4 cm and area 46 to 79 cm2. Club extensograph 45 min maximum resistance, extensibility, and area are 107 BU, 17.2 cm, and 23 cm2, respectively.
  • Alveograph SW ranges include P values 37 to 42 mm; L values 57 to 68 mm; and W values 63 to 78 (10-4 J). Average Club alveograph P, L and W values of 27 mm, 43 mm, and 29 (10-4 J), respectively.
  • Sponge Cake SW volumes range from 1077 to 1104 cc, depending on protein content, with a weighted average of 1081 cc. Total sponge cake score is 33 to 49, with a weighted average of 35. Club sponge cake volume is 1070 cc with a total score of 34. Scores were lower due to firmer textures.
  • Cookie SW diameters are 8.6 to 8.7 cm with spread factors of 10.1 to 10.4. Club diameter and spread factor are 9.1 and 12.6 cm, respectively.
  • Chinese Southern-Type Steamed Bread specific volumes are 2.2 to 2.4 mL/g with total scores less than the control score of 70.0. Club specific volume is 2.3 mL/g with a total score below the control.

Read more about the 2021 soft white wheat crop here and view the full regional report here.

2021 Crop Quality Data on Other U.S. Wheat Classes

Hard Red Winter
Hard Red Spring
Soft Red Winter
Northern Durum
Desert Durum® And California Hard Red Winter
Hard White

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Wheat Industry News

Recent news and highlights from around the U.S. wheat industry.

Speaking of Wheat. The government started to pay more attention to the grains industry, and while it has trumpeted the country’s position as the top wheat exporter, at the same time, it started to intervene in exports. After several years of temporary export restrictions, from June this year, Moscow implemented permanent export tariffs on all key grains in response to increasing domestic grain prices and to protect domestic consumers from rising food inflation.” Andrey Sizov, Managing Director, SovEcon, writing in a Sept. 24, 2021, editorial in Financial Times.

Congratulations to U.S. Wheat Associates (USW) colleague Ting Liu and her husband Boxuan Feng, who welcomed a daughter, temporarily known as Yoyo (悠悠), Oct. 3. Ting is a Technical Specialist in the USW Beijing Office. Congratulations to Ting and her family!

Grain Craft Opens Lab in Kansas Wheat Complex. Grain Craft opened its new Grain Craft Innovation and Quality (GCIQ) Lab within the Kansas Wheat Innovation Center in Manhattan on Oct. 1. Announcing the opening, the company said the GCIQ Lab will support improvement in wheat quality, flour quality and flour consistency along with an ongoing exploration of innovation opportunities. Grain Craft is the largest independent flour miller in the United States, offering premium bulk and bagged flours for the baking, food service, tortilla and pizza industries. Read more here.

Grant to Increase Food Crop Nutrition Awarded. An approach that promises to increase nutrition literally from the ground up, Washington State University’s Soil to Society project, recently received a five-year, $10 million grant from the USDA’s National Institute of Food and Agriculture (NIFA). The project takes a comprehensive approach to increase the nutrient value in food made from six crops – wheat, barley, peas, lentils, buckwheat, and quinoa. Soil scientists will work to improve the soil quality where they are grown. Plant breeders will develop more nutritional varieties while food scientists will create products to bring to market, and health researchers will evaluate the impact of those foods. Read more here.

U.S. Wheat Associates Publishes Commercial Sales every Thursday, documenting wheat export sales-to-date by country and class for the current marketing year compared to the previous marketing year on the same date. The report includes a 10-year commercial sales history by class and country. Data is sourced from the USDA Foreign Agricultural Service Weekly Export Sales Report. Read the latest report on the USW website.

Subscribe to USW Reports. USW publishes various reports and content that are 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 more on LinkedIn.

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North American Millers Meet; NAWG CEO Talks Sustainable Production

More than 100 milling industry leaders and their guests gathered for three days of education and networking during the recent 2021 North American Millers’ Association Annual Meeting in Boca Raton, Florida.

“NAMA was proud to once again host milling executives from across North America at the NAMA Annual Meeting. NAMA Milling and Associate Members learned from expert speakers and set the course for NAMA’s work looking ahead into 2022 and beyond,” said NAMA President Jane DeMarchi. “As the pandemic recovery process moves forward and Capitol Hill and the Administration continue to act on industry priorities, NAMA’s role has never been more important.”

The general session presentations focused on critical topics facing the milling sector in 2021, including cybersecurity, sustainability, and workforce development. With a focus on U.S. wheat sustainable production, National Association of Wheat Growers CEO Chandler Goule told NAMA members that growers are producing more wheat on fewer acres.

Chandler Goule

Chandler Goule, CEO, National Association of Wheat Growers

“We know we have a great story,” Goule said. “We know we are sustainable. We know that when we are looking at what is coming ahead — whether through sustainability programs coming from the private sector or whether it is something coming in from the government.”

In an article about his presentation in World-Grain.com, Goule did note that more research is required quantifying the environmental impact of wheat production and the industry is responding.

“What we don’t have is a life cycle assessment of the wheat production,” he said. “NAWG and NAWG Foundation are working with U.S. Wheat Associates (USW) to work with a land grant university to determine how much water we use, what is our carbon footprint.”

To avoid the pitting of one wheat class against another, data will be aggregated between classes, Goule said. The work is expected to begin in November and will generate important information for the upcoming farm bill. Food companies also are asking for the data, which will provide a baseline against which improvement may be measured, Goule said.

The North American Millers’ Association is the only national trade association that exclusively represents the interests of the North American wheat, corn, oat, and rye milling industry before Congress, federal agencies, and international regulatory bodies. Member companies operate mills in 31 states, Puerto Rico, and Canada, representing more than 90 percent of total industry production capacity.

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Higher U.S. and World Wheat Prices Recall Another Bull Market

A surprising drop in USDA’s estimate of U.S. wheat production in the September 30 Small Grains Summary Report helped support the trend of higher U.S. and world wheat prices. The recent sustained run-up in prices calls to mind another (and even more challenging) bull wheat market beginning in marketing year 2006/07 and continuing through 2007/08.

In March 2008, then U.S. Wheat Associates (USW) Senior Market Analyst Joe Sowers wrote in Wheat Letter that 2007/08 had been a remarkable year. He noted that “unforeseen weather calamities around the globe and major wheat exporters protecting supplies for domestic use” helped push stocks to their lowest level in 60 years and drove prices to record highs at the time. That supply shock followed a period in which wheat use outpaced production in 7 of the prior 10 years. Read Sowers’ article here.

Lower world wheat supplies and some key exporters still trying to hold down domestic food prices are also fueling the current market rally.

Today’s Supply Issues

The challenges reducing worldwide wheat production and global stocks are well known at this point. The most recent Small Grains Report listed all wheat total production 10% below 2020 at 44.9 MMT (1.65 billion bushels). The report also fell short of average industry estimates and the NASS August projections. Despite a 5% increase in planted area in 2021 compared to 2020 and harvested area being up 1%, dry conditions ultimately trimmed total production. Winter wheat production was up 9% compared to 2020 while spring wheat bushels were down 44% compared to 2020, their lowest level since 1988. Durum wheat was down 46%.

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report released October 12 also signaled lower production. USDA cut world wheat production by 4.4 MMT and trimmed ending stocks by 6 MMT. The report briefly sent U.S. wheat futures higher (followed on October 13 by managed money profit-taking). The report showed that for the second year in a row, ending stocks have declined following a long period of sustained annual growth. Compared to the highest ending stocks on record in 2019/20, ending stocks this year are down more than 17 MMT. USDA now projects 2021/22 world use to outpace production by 11.0 MMT — while global wheat demand continues to set new records.

Drought conditions in Canada, the United States and Russia, along with quality issues in the European Union, have cut exportable wheat supplies.

Intervention Raises Import Cost

As it did in 2007/08, government intervention continues to hurt the world’s wheat importers. Russia’s export tax, which keeps going up, has helped increase global wheat prices. Russia’s agriculture ministry also laid out plans for an export quota beginning February 15 and lasting through the remainder of the 2021/22 season ending June 30, 2022. In Ukraine, which had better-growing conditions than neighboring Russia and is on an export pace well ahead of last year, the government and grain association are still at odds over what to do with surplus wheat. Kazakhstan was the first to announce plans to limit wheat exports but in early September the Kazak president called that idea “premature.”

Wheat futures prices 2006 to 2021

The bull wheat market from 2006 to 2008, seen here in U.S. wheat futures prices, was fueled by sharp drops in global wheat supplies from bad weather and intervention by some exporting countries’ governments. Supply and intervention also helped push prices up in late 2010. That pattern emerged again in 2020 as the market reacted to shorter supply and continued, trade-distorting government policies.

Differences and New Challenges

Will the current pressure on global wheat supplies continue? That remains to be seen. Higher prices do tend to stimulate an increase in planted area. Wheat varieties around the world are much improved from 13 years ago in their ability to perform better under production stresses. Farmers in every major exporting country are managing their crops better and in more sustainable ways.

New circumstances have added concerns for wheat importers. The ongoing challenges of the COVID-19 pandemic, including its contribution to dramatically rising freight costs with record recent gains in the Baltic Index, are unprecedented.

The critical consideration for wheat buyers and flour users today, as it was in 2007/08 when Joe Sowers wrote about that remarkable year, is whether they can rely on good weather to increase supplies and reduce world wheat prices for the rest of 2021/22 and into 2022/23.

By Michael Anderson, USW Market Analyst

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Abundant 2021 Hard Red Winter Crop Reflects Expected Functionality, Value

Variable growing conditions greatly influenced the 2021 hard red winter (HRW) wheat crop. In areas with favorable growing conditions, high yields resulted in lower protein but excellent kernel characteristics. However, regional swings in temperature and drought led to high protein, lower yields and smaller kernels.

As a result, the overall crop has generally good kernel characteristics with flour, dough and bake attributes equal to or better than last year and many of the 5-year averages. The loaf volumes achieved indicate there is sufficient protein quality to make pan bread that easily exceeds the U.S. quality target for loaf volume, with dough mix times and stabilities that are slightly greater than the 5-year average.

This crop meets or exceeds typical HRW contract specifications and should provide high value to customers.

Weather and Harvest

Planted area for the 2021 hard red winter crop recovered from last year’s historic lows with an estimated 9.6 million hectares (23.6 million acres) seeded in fall 2020, a 10% increase over last year.

Growing conditions varied among the HRW production regions. Eastern areas of the Southern and Central Great Plains experienced favorable growing conditions resulting in high yields, very good kernel characteristics, but lower protein. While western areas of the Southern and Central Plains experienced drought and record freeze events resulting in lower yields and smaller kernels, but higher protein. The Northern Great Plains and PNW suffered historic drought conditions that hurt yield and kernel characteristics.

Production of the 2021 HRW crop is estimated to be 20.4 million metric tons (MMT), up from 17.93 MMT in 2020 and above the 5-year average of 20.8 MMT.

With very few exceptions, disease and insect pressure were not major issues for the 2021 HRW crop.

2021 map of hard red winter wheat production and sampling

2021 U.S. Hard Red Winter harvest in Oklahoma

The Daniel Crossley Farm near Okarche, Okla., was a few days into the HRW wheat harvest on June 15, 2021. Custom harvester SJS Farms, Lorreto, Minn., provided the equipment and manpower to bring in the crop. Photo by Todd Johnson, Communications Specialist, Oklahoma State University.

2021 Crop Highlights

  • The Composite average grade for the 2021 hard red winter harvest survey is U.S. No. 1 HRW. Despite challenging growing conditions in some regions, overall, 84% of Composite, 85% of Gulf-tributary and 83% of PNW-tributary samples graded U.S. No. 2 or better.
  • Test weight Composite average is 79.5 kg/hl (60.4 lb/bu), indicative of sound wheat.
  • Protein content distribution varies by growing region; Composite average is 11.9% (12% mb), equal to last year but below the 5-year average.
  • Composite averages for dockage (0.5%), total defects (1.7%), and foreign materials (0.3%) are above 2020 and 5-year averages.
  • Shrunken and broken kernels (0.8 %), values reflect the environmental challenges for this year’s crop.
  • Wheat falling number Composite average is 372 sec, indicative of sound wheat.
  • The Buhler lab mill extraction Composite average is 74.9%, above last year but below the 5-year average.
  • Flour ash Composite average of 0.50% (14% mb) is comparable to last year and 5-year averages.
  • Farinograph peak and stability times of 5.1 and 9.3 min, respectively, are shorter than last year but higher than the 5-year average.
  • Dough properties suggest that this crop has similar resistance to extension (tenacity) to both last year and the 5-year average, but slightly weaker dough strength (Alveograph W value) compared to last year and the 5-year average. Dough extensibility was significantly lower than last year but similar to the 5-year average.
  • Average bake absorption is 62.1%, below last year but comparable to the 5-year average.
  • Average loaf volume of 877 cc is well above last year and 5-year averages, indicative of acceptable baking quality.

Read more about the 2021 U.S. hard red winter wheat crop here and the full regional report here.

2021 Crop Quality Data on Other U.S. Wheat Classes

Hard Red Spring
Soft White
Soft Red Winter
Northern Durum
Desert Durum® And California Hard Red Winter
Hard White

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Wheat Industry News

Recent news and highlights from around the U.S. wheat industry.

Speaking of Wheat. “…While the [wheat] charts are showing some signs of stabilization (maybe…), they need a bullish input to re-start the rally, which…may, or may not…develop for a while. I mentioned the reports coming out [Sept. 30]. They could easily be market movers, and not necessarily what you hope for, so …please make sure you’re comfortable with your marketing plans.” Dan Maltby, Risk Management Group, Chanhassen, Minn.

Today’s USDA Small Grains Annual Summary report offered a better understanding of how much hard red spring (HRS) wheat was not harvested for grain (abandoned or baled for animal feed) in 2021. The report indicated that about 12% of HRS planted area in South Dakota, Minnesota, North Dakota Montana was not harvested for grain, which compares to less than 2% not harvested in 2020. Total HRS production at 297.4 million bushels is down 44% from 2020 production. Durum production is down 46% from 2020 levels. USDA pegged total U.S. soft white (SW) production at slightly more than 175 million bushels, which is down about 37% from 2020. U.S. hard red winter, soft red winter and hard white production increased in 2021 compared to 2020.

Agriculture and Agri-Food Canada in a recent report stated that “for all principal field crops, a low level of carry-in stocks (beginning year inventories) combined with a substantial decrease in production is expected to result in a 25% decline in total supplies, which more-than offsets a sharp decline in exports and results in a further tightening of carry-out stocks to a record low level.”

From Kansas Wheat. “The fall fieldwork season is a flurry of activity as Kansas farmers harvest fall crops, eye the end of haying and put this year’s wheat crop in the ground. As they do, the U.S. grain supply chain is also hard at work, moving this year’s crop through an extensive network to destinations foreign and domestic. Tracking the ebb and flow of wheat through the U.S. wheat supply chain is yet another tool Kansas farmers can use in their grain marketing plans for the upcoming year.” Read more here.

GMO Wheat In the News. Reuters reported this week that Brazilian flour millers stated publicly that they are against processing imported wheat with a transgenic trait that helps the variety be more drought-tolerant. Commercialization of the transgenic variety in Argentina is contingent on Brazil’s approval of the variety. Reuters reported that the head of Abitrigo, the Brazilian Wheat Industry Association, said its members may stop buying wheat from Argentina if Brazil’s government approves imports of the variety.

Subscribe to USW Reports. USW publishes various reports and content that are 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 more on LinkedIn.

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How to Understand and Utilize the U.S. Wheat Associates Price Report

The U.S. farm families who produce wheat and the entire U.S. supply chain remain committed to operating a transparent and open market. How export prices are discovered is one of the reasons why our overseas customers know they can depend on the integrity of our supply chain, the quality of U.S. wheat and our unmatched reliability as a supplier. U.S. wheat export prices are discovered openly through futures exchanges and the cost to move wheat to the loading equipment at export elevators, and prices are always available to customers. In addition, private exporters use risk management tools to honor sales contract prices often made months in advance of vessel loading. However, we recognize that navigating U.S. export markets and making purchasing decisions is a complicated, risk-involved process, especially when wheat customers have so many options for sourcing their supplies. For many years, U.S. Wheat Associates (USW) has helped wheat buyers navigate this process and discover export prices by publishing its weekly wheat price report on its website.

What is the USW Price Report?

The weekly U.S. wheat export prices as reported by USW each Friday after wheat futures markets close are compiled through research from numerous market sources, including U.S. wheat exporters of all classes from various U.S. ports. The prices reported the Free on Board (FOB) estimated value of number two grade and the proteins indicated. They are not intended to represent offers nor should U.S. wheat importers rely on them as such. Additional factors may alter these prices significantly* and USW recommends that buyers maintain regular contact with suppliers to receive offers representing their requirements.

In addition to estimated prices of U.S. wheat by class (not including durum nor hard white wheat), protein level, export region and delivery period, Price Report also includes weekly futures prices select ocean rates and currency exchange rates, charts that provide context and market highlights that help buyers understand the market more thoroughly.

How is the USW Price Report assembled?

The USW Market Analyst begins by surveying export wheat company representatives trading the U.S. wheat classes from the Gulf, Pacific Northwest (PNW) and Great Lakes. The traders provide the week’s current basis, which is the difference between cash price offered for a commodity at a specific location and a futures contract price for that commodity. The basis is then added to the Friday closing futures price from the exchange on which the wheat class is traded: hard red spring (HRS) on the Minneapolis Grains Exchange (MGEX); hard red winter (HRW) on the Kansas City Board of Trade (KCBT); and soft red winter (SRW) on the Chicago Board of Trade (CBOT). PNW soft white (SW) and Western White correspond to the CBOT futures price. Expressed as an equation: Export Basis + Futures Price = Cash Price (FOB).

How to Read the Price Report

Posted below is the front page of a past Price Report, which has been color-coded to display the information featured in the report. The delivery month is in chronological order and details forward pricing. Each month also includes wheat futures month codes as follows: H=March; K=May; N=July; U=September; Z=December. The futures month codes are combined with the calendar year to show the futures price reference and delivery month.

For example, in the column Nov (Z21), “Nov” represents November delivery and Z21 represents the November delivery price based on the December 2021 wheat futures contract. To calculate the estimated export price of wheat in November, the November export basis, quoted in cents, in red, is added to the FOB price in green. The total is the FOB price, in purple.

Color coded Price Report

More on Export Basis

Export basis can move up or down, affecting the export price of wheat, due to a variety of these factors. Some factors affecting export basis include transportation costs (trucking, barge, and rail rates), storage and elevation costs at export terminals, supply and customer demand, quality specifications, handling costs and profit margins, among other factors. Wheat export prices are also directly tied to movements in the futures market. In addition, export basis varies by exporting company, so USW Price Report basis prices represent an average of the shared quotes from traders.

Additional Resources in Each USW Price Report

Ocean Freight rates are included on the second page of each USW Price Report. Rates come from industry representatives each week and show many common vessel sizes and routes. A variety of charts are included in the USW Price Report to help customers visualize price trends. In addition, a Daily Futures Settlement Prices chart shows a week-on-week snapshot of the futures exchange.

USW Price Report Charts Page

Finally, on the last page of the Price Report, highlights that we have gleaned from several sources on potential market factors in the global wheat market help give meaning to price movements for the week. The futures highlight explains fundamental and technical factors affecting futures movement week-over-week. Export basis details the international and domestic conditions affecting basis movement by class and export region week-over-week. Highlights also include important information published by the USDA including crop progress and acreage, commercial U.S. export sales, U.S. Drought Monitor and foreign wheat marketing and production updates.

In the video below, a past USW Market Analyst shares a more detailed review of the USW Price Report, how it is assembled and how to understand and utilize the data.

An open, transparent pricing system is essential to a functioning global market and USW wants its customers to have as much information and tools available to them when making wheat purchasing decisions. Buyers should contact their suppliers to obtain prices based on their specific requirements and contract terms.

The weekly USW Price Report can be viewed here. Sign up to receive the report directly to your inbox every Friday by subscribing to the weekly USW Price Report email.

*These factors may include: (1) payment terms (differing from cash against documents which are the terms used in the U.S. Wheat Associates price report); (2) various quality factors, and method of quality certification; (3) loading terms (USW prices represent Free on Board and do not include loading rate guarantees, stevedoring costs or other elevator tariff charges); (4) different delivery periods than indicated in monthly prices reported by U. S. Wheat Associates.

By Michael Anderson, USW Market Analyst

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