Wheat Letter Blog Archive - Page 50 of 104

Fundamental, Technical Factors Lifted U.S. Wheat Futures Prices

Given the strong surge in U.S. wheat futures prices over the past several weeks, U.S. Wheat Associates (USW) wants to share more information about the market factors behind the rise.

Some of the bullish factors do not appear to be short-lived. Driving the recent highs was remarkably higher Chinese demand for U.S. soybeans, corn and wheat; increased investments by managed money in U.S. agricultural commodities exchanges; news that the Russian government increased its wheat export tax; and continued dryness in the High and Southern Plains.

U.S. wheat futures prices for nearby delivery

By late January 2021, CBOT soft red winter (SRW) and KCBT hard red winter (HRW) futures prices reached their highest level in more than six years and MGE hard red spring (HRS) futures prices reached their highest level since late 2017. Source: DTN

U.S. Corn, Soybean and Wheat Exports to China

Historic U.S. commodity sales to China are supporting high wheat futures prices. To date, the United States has sold 11.8 million metric tons (MMT) of corn to China, completely eclipsing the last record of 4.90 MMT shipped to China in 2013. According to Reuters, China is on track to be the largest importer of U.S. corn for the first time in history. And sales aren’t slowing down: on Jan. 29, USDA reported a flash sale of 2.10 MMT of corn to China, the largest sale of U.S. corn to an overseas customer in a single day since 1991.

U.S. soybean sales to China have also set records. To date, the U.S. has sold 34.7 MMT of soybeans to China, 190% more than this time last year and 74% more than the 5-year average.

China’s demand for U.S. wheat has also been strong. Total sales to China, now the third-largest market for U.S. wheat, are substantially higher than this time last year at 2.58 MMT, more than 5 times greater than the 5-year average. HRW sales to China now total 1.13 MMT, the first major Chinese HRW purchase in many years. HRS sales to China of 566,000 metric tons (MT) are nearly nine times greater than the same period in 2020 and white wheat (soft and hard) sales are up more than 400% at 714,000 MT.

Source: USDA FAS export sales data as of Jan. 21, 2021

Technical Strength

Joining the trade excitement are managed futures funds, an investment where professionals actively manage a futures contract portfolio. These speculative commodity funds are buying significant amounts of U.S. corn, soybean and wheat futures contracts. They are “long” in the markets with the expectation that the contracts will gain value over time.

“Simply put: China is driving the boat,” said one U.S.-based trader. “Funds are pouring money into Chicago and other exchanges because of our massive balance sheet of sales to China.”

“If corn jumps 19 cents per bushel in one day, wheat is going to follow in a big way,” said another trader.

Managed fund participants serve an important role in futures markets, giving buyers and users of a commodity like wheat the opportunity to hedge their price risk through speculators that accept the risk of price movements.

Russian Wheat Export Tax

What happens in a leading wheat exporting nation can move the market. On Jan. 26, the Russian government announced it would increase the country’s wheat export tax from €25 per MT to €50 per MT for March 1 to June 30 deliveries in an attempt to secure domestic food supplies and stabilize domestic prices. After Russia’s government approved the tax increase, Minister of Economic Development Maxim Reshetnikov said: “We hope in the near future the price situation will stabilize and we will be able to switch to a permanent mechanism of export duties.” Even so, USDA expects total Russian wheat exports in 2020/21 will reach 39.0 MMT, up 13% from last year and 18% more than the 5-year average, if realized.

The increased wheat export tax and minimal domestic selling by Russian farmers have also supported global wheat export prices. According to AgriCensus, between early December 2020, before the initial €25 per MT tariff was announced, and early February 2021, Russian 11.5% protein wheat (dry matter basis) free on board (FOB) prices increased 15% to $292 per MT. By comparison, Texas Gulf 11% HRW (12% moisture basis) FOB traded at $280 per MT at the beginning of February.

Source: AgriCensus

Drought Stress Across the Great Plains

Despite recent precipitation in some areas, extreme dryness continues to plague U.S. winter wheat producers, an all too familiar situation for wheat farmers in eastern Colorado, western Kansas, western Nebraska and eastern Wyoming.

“Dryness in the Plains adds underlying support to wheat futures prices,” said a grain trade representative.

As of Jan. 28, according to USDA, Colorado winter wheat ratings slipped from 19% good to excellent in early January to 17% by late January and 43% of Kansas winter wheat was rated good to excellent, down from 46% in late December 2020. USDA also reported that as of Jan. 26, 2021, “an estimated 32% of U.S. winter wheat production is within an area experiencing drought,” including major sections of U.S. hard red spring and northern durum production regions.

Every Friday, USW compiles information from market sources, including U.S. wheat exporters of all classes from various U.S. ports.

By Claire Hutchins, USW Market Analyst

February 3, 2021/by actualize

Shelbi Knisley, Sustainability

Technology, Innovative Farming Practices Advance Wheat Farm Sustainability

Across the United States, farmers produce more and better quality wheat using innovative farming practices including fewer natural resources, including land. According to an American Farm Bureau Federation report, in 2018, farmers needed about 8 million fewer acres (3.24 million hectares) to produce the same amount of wheat as in 1990.

The Biden Administration is currently establishing clear policy goals to fight climate change and reward conservation. It is more important than ever to share the success stories of how U.S. wheat farmers employ sustainable, innovative farming practices to protect their land and positively impact the environment.

U.S. wheat farmers are more economical and sustainable today by implementing agronomic practices and investing in technologies, research and development. Technology plays an essential role in making U.S. agriculture sustainable. When wheat breeders use advanced techniques and technologies to produce high-yielding, high-quality wheat varieties, it contributes to preserving the land’s natural resources through water and soil nutrient conservation that work in harmony with local conditions.

In their production, U.S. wheat farmers apply many aspects of the following sustainable tools and practices:

Reduced Tillage

The USDA Economic Research Service reports that reduced tillage has grown in popularity, and farmers implement the practice on nearly 70% of U.S. wheat acres. While at times a necessary tool, traditional plowing and other deep tillage can be concerning. Continuous wheat production with deep tillage contributed to the infamous U.S. “Dust Bowl” of the 1930s. The introduction of reduced-till and no-till practices has helped reduce soil erosion and increase water retention on dryland crops. This practice also reduces fuel use and promotes carbon sequestration. Read more about the sustainability of practicing no-till farming here.

Crop Rotation and Cover Crops

After harvest, most wheat farmers practice crop rotation and switch to a different crop in the same fields. However, more and more farms are planting “cover crops” after harvest. Farmers incorporate this crop into the soil before planting the next crop. Both these practices are beneficial in preserving soil health as well as conserving water. Cover crops add soil nutrients and organic matter and help prevent soil and water runoff. In one study, Desert Durum® wheat farmers who rotate to lettuce crops following their durum harvest reduced water use on average about 30%.

On his family’s Kansas farm, Justin Knopf has invested in soil health through cover crops, no-till and crop rotations.

Water Conservation

Wheat is a naturally water-efficient crop. In much of the United States, wheat is grown during cooler months and has a longer growing season – providing more opportunity for it to capture naturally occurring precipitation. Only about 10% of U.S. wheat acres are irrigated. Even when farmers irrigate their wheat, it often needs less irrigation than many other crops.

California grower Roy Motter innovative farming practices like crop rotations. rotation crop to

California grower Roy Motter uses Desert Durum® as a rotation crop to let the soil rest between vegetable crops and to help control weeds and disease. Growing durum in a rotation with lettuce reduces water use on his farm by 24% to 50%.

Precision Agriculture

Farmers use technologies such as crop yield monitors, soil maps and global positioning systems (GPS), and drones. These technologies allow farmers to apply inputs more precisely, monitor plant health and collect data on soil nutrients and other natural resources. For example, such technology enables farmers to adjust seed, fertilizer and crop protection inputs with near pinpoint accuracy, ensuring the correct rates are applied or seeded in the right location while on the go in their fields. Greater efficiency through precision agriculture practices means greater economic and environmental sustainability.

Oregon soft white wheat grower Bob Johns (right in the photo at the top of the page) and his farming partner Chris Williams (left) say technology from improved breeding to drones help them make better-informed decisions about how inputs and management affect their yields, soil and crop health, and profitability.

U.S. Wheat Associates (USW) supports finding new ways to improve wheat quality and increase production with less impact on the environment. To learn more about how U.S. wheat farmers are using innovative farming practices to produce more food and fiber sustainably, visit the “Innovation and Sustainability” section of our website.

By Shelbi Knisley, USW Director of Trade Policy

Read other stories in this series:

Special Climate and Sustainability Committee Launched on Earth Day
Precision Agriculture Improves Environmental Stewardship While Increasing Yields
U.S. Farmers Always Think About Economic and Environmental Sustainability
Minnesota Farmer Spread the News with His Conservation Practices
U.S. Farmers Embrace Conversation Practices
Farmers Look to New Technologies to Foster Precision Agriculture
Cargill CEO Highlights Farmers Role in Pandemic and Promoting Sustainability

February 2, 2021/by actualize

Plant Breeding Innovation, Wheat Quality

Public Wheat Breeding Programs Serving Southern and Central Plains Farmers

Throughout 2021, the U.S. Wheat Associates (USW) Wheat Letter is featuring the many stories of the people, processes and passions that go into producing and delivering high-quality U.S. wheat to the world. Our focus will be on quality that starts with dedicated private and public wheat breeding programs, is fostered by hard-working farm families, is maintained by grain handlers and observed in hundreds of wholesome, nutritious wheat foods.

There is a wide range of U.S. public and commercial breeding programs working to develop wheat classes and varieties adapted to the production constraints in different regions while meeting customer end-use needs. An estimated 65% of all U.S. wheat varieties across six distinct classes were developed by public university breeding programs, funded in part by state wheat commissions, royalties from the sale of public varieties, and the USDA Agricultural Research Service (ARS).

In this post, Wheat Letter offers broad information about public university wheat breeding programs in Texas, Oklahoma, Kansas, Colorado and Nebraska. Future posts will cover breeding programs in other states.

Texas A&M

With support from research grants from the Texas Wheat Producers Board (TWPB), Texas A&M University puts a major focus on projects aimed at enhancing end-use wheat quality to produce a product with more functionality for domestic and overseas customers. For example, TWPB points to the recent development of two new Texas A&M winter wheat varieties that performed well with fewer inputs, decreasing farm financial burdens while showing exceptional milling and baking characteristics.

Dr. Amir Ibrahim is a professor and the project leader of the Texas A&M Small Grains Breeding program. He manages wheat cultivar development for South and Central Texas among other responsibilities. Dr. Jackie Rudd, Texas A&M AgriLife Research wheat breeder in the Texas Panhandle is also working to develop better wheat varieties for breadmaking and farmers alike. An associate research scientist in the AgriLife Cereal Quality Lab and other specialized researchers are part of the Texas A&M wheat team.

Texas A&M geneticists Dr. Shuyu Liu (second from left) and Dr. Chenggen Chu (right) are using doubled haploid plants to shorten the time to develop genetically pure lines in a traditional winter wheat breeding scheme.

Oklahoma State University

Wheat Improvement research in Oklahoma is driven by an interdisciplinary team of Oklahoma State University (OSU) scientists charged with developing highly adapted winter wheat cultivars with marketable grain quality, in partnership with the Oklahoma Wheat Commission (OWC) and the Oklahoma Wheat Research Foundation. Dr. Brett Carver directs the program as OSU Wheat Genetics Chair.

OWC Executive Director Mike Schulte says the wheat genetics program is committed to excellence in creating varieties to meet the specific needs of Oklahoma wheat producers and the milling and baking industries. OSU varieties are sold to farmers through Oklahoma Genetics, Inc., a non-profit organization directed by Oklahoma farmers.

“OSU wheat varieties, thanks in large part to significant investment by producers through the check-off OWC manages, have led the state in planted area every year since 2010,” said Dr. Carver. “In addition, the top planted varieties from OSU almost always appear on preferred variety lists publicized by the U.S. domestic milling industry over the past five years. The emphasis by the OSU Wheat Improvement Team is, and will continue to be, on a quality yield, not just yield alone.”

OSU wheat genetics lead Dr. Brett Carver (right) in 2019 discussed cross breeding techniques to select for functional quality in hard red winter wheat with British officials at the OSU research facilities.

Kansas State University

The wheat breeding team at Kansas State University (K-State), led by Dr. Allan Fritz in Manhattan, Kan. and Dr. Guorong Zhang at K-State’s Agricultural Research Center in Hays, Kan., has produced the most widely planted varieties in Kansas in nine of the past 10 years through the Kansas Wheat Alliance.

The world-renowned Wheat Genetics Resource Center (WGRC) has established a national and international network to conduct and coordinate genetic studies in wheat. Located in the Kansas Wheat Innovation Center, the state’s single-largest, farmer investment in wheat research, the WGRC has also been recently designated as a National Science Foundation Industry/University Cooperative Research Center. This is the first I/UCRC focusing on plant sciences. The main K-State breeding team works with the WGRC on genomic mapping and marker-assisted breeding. Other cooperators include the USDA-ARS Hard Wheat Quality Laboratory and wheat programs in the Plant Pathology and Grain Science Departments. Some germplasm lines are also released in conjunction with USDA’s hard winter wheat genetics program.

There is tremendous producer support in the state and region for K-State’s wheat varieties and breeding program. Generous funding for its efforts comes from the Kansas Wheat Commission. Wheat quality is also a priority. Varieties tested for two years and earmarked for release are entered in the Wheat Quality Council (WQC) Milling and Baking Test Program to ensure the varieties meet WQC milling and baking standards. Grain Craft has recently moved its Wheat Quality Lab to the Kansas Wheat Innovation Center, which completes the missing piece in the puzzle in the facility, from variety development through end-use quality testing.

In addition, in 2020, the USDA’s National Institute for Food and Agriculture awarded K-State a $1 million grant to establish the International Wheat Yield Partnership (IWYP) Winter Wheat Breeding Innovation Hub. K-State will lead the effort to evaluate research findings from several IWYP projects that contribute to “significantly improve” wheat yields.

The research team led by Dr. Allan Fritz (above) in Manhattan, Kan., and Dr. Guorong Zhang at K-State’s Agricultural Research Center in Hays, Kan., has produced the most widely planted wheat varieties in Kansas in nine of the past 10 years.

Colorado State University

Thanks to help from Colorado farmers through the Colorado Wheat Administrative Committee, the Colorado State University (CSU) wheat breeding program has built a reputation for success. The goal is to develop varieties that are adapted to Colorado’s unique growing conditions but also have excellent end-use quality to meet milling and baking needs. In 2019, Wheat Quality Lab Manager John Stromberger, now retired Wheat Breeder Dr. Scott Haley, and Extension Agronomist Jerry Johnson, reported on the quality of CSU trial varieties and encouraged producers to carefully consider planting agronomically acceptable varieties with better quality. CSU wheat breeding will continue under the direction of Dr. Esten Mason.

The Colorado Wheat Research Foundation (CWRF) works hand in hand with CSU to help develop and distribute new wheat varieties. As the university develops new varieties, CWRF takes ownership and works with eligible certified seed growers. CWRF collects royalties for certified seed that supply funding for more CSU wheat research. These varieties are sold under the brand name PlainsGold^TM.

A portion of funding for wheat breeding and research at Colorado State University comes from the sales of public wheat varieties.

University of Nebraska-Lincoln

The Nebraska Wheat Board supports research and breeding programs at the University of Nebraska-Lincoln (UNL) and USDA-ARS efforts to improve agronomic performance for producers, and end-use quality characteristics for millers, bakers and consumers. Dr. Stephen Baenziger heads the UNL small grains breeding program and says the work is highly dependent on a wide range of researchers and public and private support.

For example, Dr. Baenziger has spent several years studying hybridization of wheat in partnership with Dr. Ibrahim of Texas A&M. Ibrahim and Baenziger have tested more than 600 lines of hybrid wheat varieties in Nebraska and Texas. They are now developing the necessary knowledge base, germplasm and enhanced trait pools or patterns from these lines to support the development of hybridized wheat.

The team’s newest project, “Plant breeding partnerships: Continuing to develop and validate the tools for hybrid wheat,” is supported by a $650,000 USDA National Institute of Food and Agriculture grant.

Dr. Stephen Baenziger leads Public Wheat Breeding Programs at University of Nebraska - Lincoln

Dr. Stephen Baenziger heads the University of Nebraska – Lincoln small grains breeding program.

Read about other U.S. wheat public breeding programs:

Programs Serving Northern Plains Producers
Programs Serving Soft Red Winter Producers
Programs Serving West Coast Producers

Read about other U.S. wheat commercial breeding programs:

BASF Corp. and Corteva
AgriPro and WestBred

February 1, 2021/by actualize

Desert Durum, Hard Red Spring, Hard Red Winter, Hard White, Market and Crop Analysis, Northern Durum, Soft Red Winter, Soft White, Supply and Demand

U.S Wheat Associates Shares Winter 2021 Wheat Supply and Demand Outlook

The U.S. Wheat Associates (USW) Board of Directors includes wheat farmer leaders appointed to represent each of the 17 state wheat commissions that are members of USW and meets three times during each marketing year (June to May). For each of the meetings, the USW Market Analyst prepares a “Wheat Supply and Demand Outlook” report based on USDA market data to provide an update on the global and U.S. wheat market. The full Winter 2021 report is posted at https://bit.ly/MarketSummary012721.

The report includes sections on world wheat supply and demand, wheat production in the major wheat exporting countries and regions, including U.S. wheat production by class, timely reports such as U.S. wheat seeded area, and U.S. commercial wheat sales.

The latest report, prepared Jan. 27, 2021, indicates marketing year 2020/21 is a significant one, with several records set. For example, USDA expects global wheat production to reach 773 million metric tons (MMT) following increased annual production in Australia, Russia and Canada among exporting countries. World wheat trade is expected to increase 1% to a record 194 MMT, which would be 7% more than the 5-year average. With strong carryover from 2019/20 and increased production, global wheat ending stocks are projected at 313 MMT, with China expected to hold 159 MMT and India 31.3 MMT of that total at the end of 2020/21. U.S wheat ending stocks, however, are expected to be the lowest since 2014/15.

USDA has also reported that U.S. winter wheat seeded area (including hard red winter, soft red winter, fall seeded soft white, hard white and Desert Durum^®) increased for the first time since 2013/14. Hutchins notes in the report that beneficial field conditions and strong farmgate price potential at planting time motivated hard red winter and soft red winter wheat producers to increase planted area from last year.

View the full Winter 2021 Wheat Supply and Demand Outlook at https://bit.ly/MarketSummary012721.

January 28, 2021/by actualize

Wheat Industry News

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

Speaking of Wheat. “American strength in agricultural exports has been built on … the principle that all markets matter. Cuba … imports $2 billion in food each year, less than ten percent from the United States. U.S. exports of potatoes, wheat … and other products stand to grow significantly.” – From a Letter to President Biden from the United States Agriculture Coalition for Cuba.

Group to Biden: Open Relations with Cuba. In a Jan. 14 letter to now President Biden, United States Agriculture Coalition for Cuba (USACC) urged “a return to policies of engagement toward Cuba, for the sake of the U.S. national interest, to boost U.S. food exports to Cuba, and to support the development of beneficial relations between our countries’ agricultural sectors.” U.S. Wheat Associates (USW) is a USACC member and signed the letter to the President.

In Case You Missed It, USW’s new film “Wholesome: The Journey of Wheat” can now be viewed on Facebook and Vimeo. USW premiered the film Jan. 12 and it has now been shared with USW’s 13 overseas offices to support U.S. wheat export market development. The film was produced with funding from the Agricultural Trade Promotion program administered by USDA’s Foreign Agricultural Service and in cooperation with USW state wheat commission members.

Wheat Industry Well-Represented on USDA Advisory Panels. Retired Washington wheat farmer and USW Past Chairman Randy Suess was recently appointed to USDA’s Agricultural Trade Advisory Committee (ATAC) for Trade in Grains, Feed, Oilseeds and Planting Seeds. He joins North Dakota Wheat Commission Administrator Neal Fisher, Kansas wheat farmer and USW Director Ron Suppes and USW Vice President of Policy Dalton Henry on that committee. In addition, USW President Vince Peterson serves on USDA’s Agricultural Policy Advisory Committee (APAC). The advisory committee system was created to ensure U.S. trade policy and trade negotiating objectives adequately reflect U.S. public- and private-sector interests.

Sincere Sympathy to USW/Cape Town Regional Programs and Marketing Specialist Domenique De Oliveira Opperman and her family on the recent passing of her father.

National Wheat Foundation (NWF) Hires Project Manager. NWF has hired Anne Osborne to manage the National Wheat Yield Contest (NWYC) and educational projects. Osborne, formerly a sales agronomist for the Farmers Union Oil Co-op, will replace Steve Joehl, who is retiring in early 2021. Read the full release here.

Subscribe to USW Reports. USW publishes a variety of reports and content that are available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts, the weekly Price Report and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online. Visit our Facebook page at 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.

January 21, 2021/by actualize

Amanda Spoo, Catherine Miller, Technical Service Activities, Trade Service Activities

U.S. Wheat Associates Finds Success in Virtual Programs in 2020

In 2020, the COVID-19 pandemic quickly brought on challenges that no industry in modern history had experienced on such an immediate, global scale. For the U.S. wheat industry and its overseas customers, who share a long history of connection, meeting face-to-face and connecting personally has always been paramount to its successful relationships. When that was no longer possible, U.S. Wheat Associates (USW) quickly pivoted and adapted to virtual programs to maintain its ties with customers and reassure them that the U.S. wheat store remained open.

In 2020, USW conducted over 296 virtual programs from March to December, which is approximately one virtual program per day since its staff and customers started experiencing office closures and event cancellations due to COVID-19. These programs reached over 11,000 people, more than double the number of individuals reached in same time span in 2019.

“According to our trade contacts, U.S. Wheat Associates has been an emerging leader in providing virtual programming,” said Mike Spier, USW vice president of overseas operations. “We reached a lot of people because our customers were also working from home and online platforms allowed them to expand these opportunities throughout their companies.”

USW’s 2020 virtual programming included its annual crop quality seminars. In a typical year, as the organization’s largest program, USW sends teams of staff, U.S. wheat farmers, state wheat commission staff and other industry experts to host 20-plus regional, local in-person seminars. Instead, this year USW videotaped 17 original presentations, each translated into as many as nine languages, and provided the videos to overseas offices to share with customers through email marketing campaigns and live webinars.

“The biggest takeaway from conducting webinars is the range and number of participants we’ve been able to reach through virtual programs. For example, we saw several participants that may be junior staff that doesn’t always get the opportunity to participate in courses or trade delegations that are usually reserved for senior staff,” said Chad Weigand, regional vice president, USW Cape Town Office. “We’ve been able to include many more people in webinars than we could if we had held the activities in person. A group traveling for a trade delegation or course typically needs to be capped at around 10 participants because of logistics and expenses. Our virtual Kansas trade delegation had over 40 participants that logged on from multiple countries throughout the region.”

USW staff also saw that the webinar format provided some anonymity that allowed participants to be more open about questions and challenges they were experiencing.

One USW technical consultant shared, “What was most noticeable was that the level of interactions with the presenters was higher than typically seen during trainings…and, without exception, the webinars ran over the allocated time due to follow up questions from the delegates.”

Looking ahead, USW will continue to stay in close contact with its customers and monitor the possibility of travel and in-person meetings on a case-by-case basis, while continuing to adapt and embrace virtual meeting opportunities.

“There are elements of meeting face-to-face with our customers and stakeholders that will always be invaluable for our industry, but the silver lining of 2020 for U.S. Wheat Associates, was that we were able to reach a larger audience,” said Spier. “Moving forward, as the world opens up, we will embrace both in-person and virtual opportunities to connect.”

By Amanda J. Spoo, USW Director of Communications; and Catherine Miller, USW Program and Planning Coordinator

January 21, 2021/by actualize

Market and Crop Analysis

Favorable Weather and Strong Income Potential Support 2021 Winter Wheat Seeding

For the first time since 2013/14, total U.S. winter wheat planted area increased on the year as producers took advantage of dry seeding conditions and strong prices through fall 2020. USDA’s 2021/22 Winter Wheat Seeding report, released Jan. 12, reported U.S. farmers planted 32.0 million acres (12.9 million hectares) of winter wheat for harvest in 2021, up 5% from marketing year 2020/21. Increases for hard red winter (HRW) and soft red winter (SRW) more than offset a slight decrease in white winter wheat planted area.

Source: USDA January 2021 Winter Wheat and Canola Seedings report

Hard Red Winter

USDA assessed HRW planted area at 22.3 million acres (9.02 million hectares), up 4% on the year. Planted acreage is up year-over-year in several major HRW-producing states with the largest increases reported in Montana, South Dakota and Kansas. Montana planted area increased 10% on the year to 1.70 million acres (688,000 hectares) and South Dakota planted area jumped 13% from last year to 710,000 acres (287,000 hectares). In both states, dry planting conditions from September to October were a welcome change compared to sodden, impassable fields in fall 2019.

“To look at this year, we have to first go back to fall 2019 planting when fields were extremely wet and producers left many acres to prevent plant,” said Reid Christopherson, executive director, South Dakota Wheat Commission. “Finally, in fall 2020 there was optimism around wheat. Conditions for seeding were good and prices were giving us encouragement, which boosted HRW planted area.”

In Kansas, HRW planted area for harvest in 2021 is up 10% from last year at 7.30 million acres (2.95 million hectares) as extreme dryness deterred producers from planning to plant corn, which is more water intensive than wheat.

Strong markets also incentivized the expansion of U.S. winter wheat acres. According to Justin Gilpin, CEO, Kansas Wheat Commission, many fallow acres in western Kansas went back into winter wheat last fall as producers reacted to a spike in futures prices. Between late August and mid-October, Kansas City Board of Trade (KCBT) HRW futures prices for nearby delivery jumped 18% to $5.59/bu, the highest since August 2018, as “managed money” or commodity funds bought significant amounts of U.S. wheat futures contracts with the expectation that the contracts would gain value over time.

HRW planted area in Colorado and Oklahoma, two other major winter wheat producing states, also increased several percentage points on the year as producers jumped on higher HRW prices.

Source: USDA January 2021 Winter Wheat and Canola Seedings report

Soft Red Winter

Total SRW planted area of 6.23 million acres (2.52 million hectares) is up 12% from 2019 and 8% from the 5-year average as producers took advantage of pristine planting conditions and strong Chicago Board of Trade (CBOT) futures prices. Increases in major SRW-producing states more than offset decreases in Ohio and Maryland.

Planted area is up significantly in states tributary to the Gulf of Mexico, namely Wisconsin, Illinois, Missouri and Tennessee. Wisconsin planted area is up 72% from last year, Missouri planted area is up 38%, Illinois planted area is up 11% and Tennessee planted area is up 33%.

“Strong futures prices, strong farm gate prices and a quick soybean harvest in many Midwestern states incentivized SRW producers to plant more wheat acres this year, specifically in Wisconsin and Missouri,” said a grain trade manager.

Like with HRW futures prices, SRW futures prices also saw a significant jump during the fall planting season as commodity funds poured money into the Chicago futures exchange.

Every Friday, U.S. Wheat Associates (USW) publishes its Price Report, compiling information from market sources, including U.S. wheat exporters of all classes from various U.S. ports. Subscribe here to receive the weekly report.

By Claire Hutchins, USW Market Analyst

January 20, 2021/by actualize

China, Dalton Henry, Trade Policy

One Year Later – Phase One Trade Deal with China Producing Results for U.S. Wheat

By Dalton Henry, USW Vice President of Policy

Just over a year ago, on Jan. 15, 2020, the U.S.-China “Phase One” agreement was signed, leading to the eventual waiver of China’s retaliatory tariffs against U.S. agricultural products. Those actions opened the door again to the largest wheat consumer in the world after nearly two years in which U.S. wheat producers were all but shut out.

While the final results of the Phase One agreement will not be written for several months, early returns show the agreement paid off in a big way for U.S. wheat producers and their Chinese customers.

The Phase One agreement contained both specific purchase targets for agricultural commodities, and structural changes to China’s import systems. To date, much of the celebration and criticism has centered on the purchase targets — with very little attention paid to the structural changes that in some instances resolved disputes decades in the making.

One dispute of relevance to wheat had been at the center of a WTO case dating back to 2015 on China’s administration of their grain tariff rate quotas (TRQ). In a case the U.S. won in mid-2019, the WTO panel found that China had not administered the quota in such as way as to be “transparent, fair or predictable.” With the WTO case entering compliance at roughly the same time as Phase One agreement was being negotiated, U.S. negotiators included additional language in the agreement to build on the WTO case win and ensure eventual Chinese compliance. That language included stipulations making clear that Chinese “State Trading Enterprises” are subject to the same rules as private companies and specific transparency requirements to make it possible to evaluate Chinese compliance with the allocation and reallocation provisions that are so important to the proper functioning of their TRQ.

With those new rules in place, China is projected to import 9 million metric tons (MMT) of wheat this marketing year — a 25-year high, and almost double their previously highest TRQ purchases. China turned to U.S. wheat producers for a significant portion of that higher import volume. Since the signing of the Phase One agreement, U.S. wheat sales to China have totaled more than 2.8 MMT — nearly 90% above USW’s long-term pre-trade war average. Those imports have come from four different classes of U.S. wheat and helped meet the demand for U.S. wheat from China’s private flour millers. This import volume is likely to make China the fourth largest export market for U.S. producers in marketing year 2020/21, which ends May 31.

Chinese wheat buyers and flour milling managers visited the Wheat Marketing Center in Portland, Ore., in May 2019 during a Contracting for Wheat Value seminar sponsored by USW. USW/Beijing Country Director Shirley Lu (second from right) translates as Wheat Marketing Center Technical Director Dr. Jayne Bock (third from left) and a colleague demonstrated falling number analysis.

There are likely to be substantial trade negotiations between China and the United States in the coming months — something wheat producers should welcome. The Phase One agreement was never supposed to be an “end-all agreement” — in fact, when it was announced, plans were already in place to start on “Phase Two,” which were eventually scrapped after COVID-19 turned the world on its head.

With a new U.S. administration taking office this week, many in agriculture are watching closely to see which way the political winds will blow those discussions with China. While there may be a desire by some for a “fresh start” in the China relationship, the Biden administration would do well for U.S. agriculture to pick up where Phase One left off and continue to build on the tremendous export potential for China. President-elect Biden’s early statements and plans to keep tariffs in place on Chinese goods until they can be reviewed are an important first step in the right direction.

January 19, 2021/by actualize

Wheat Quality

Virtual Reality in Wheat Quality Research and Outreach

Throughout 2021, the U.S. Wheat Associates (USW) Wheat Letter is featuring the many stories of the people, processes and passions that go into producing and delivering high quality U.S. wheat to the world. Our focus will be on quality that starts with dedicated public and private wheat breeders and researchers, is fostered by hard-working farm families, is maintained by grain handlers and observed in hundreds of wholesome, nutritious wheat foods.

“Virtual reality is transforming research and outreach activities in the Plant Sciences Department at North Dakota State University, and the wave is just beginning,” says Dr. Senay Simsek, professor and director of the Wheat Quality and Carbohydrate Research Program.

Virtual reality is a three-dimensional, computer-generated experience that allows a person to interact with spaces and objects within an entirely virtual environment. Simsek worked with Be More Colorful, a virtual reality solutions firm in Fargo, N.D., that created 360-degree images of the wheat quality and carbohydrate labs. Then they embedded informational videos provided by Simsek about the lab tests and equipment into the 360-degree images to create a complete virtual tour of the wheat quality and carbohydrate chemistry laboratories.

Designated users of this technology access the virtual tours using a VR headset or as a desktop experience in any web browser. During the tour, they experience wheat quality facilities in 3D, which creates the feeling that they are visiting in person, even though they may be thousands of miles away. Now, anyone can explore from the comfort of their home or office how wheat kernels are tested for quality, how wheat is milled, how flour and dough samples are analyzed, how bread is baked for end-product quality, and many other tests.

Student Ana Magallanes explores the Virtual Reality tour of Dr. Senay Simsek’s Wheat Quality and Carbohydrate Research Program at North Dakota State University.

The VR tours containing Simsek’s training videos are not publicly available but the 360-degree images of the labs can be viewed at https://tours.bemorecolorful.com/v/rNj79kPE1Jd. Move the computer mouse around to view different parts of the room. Click the drop-down menu in the top left corner of the image to access other rooms. To learn more about wheat quality in the world of VR, contact Dr. Senay Simsek at [email protected].

Dr. Senay Simsek is using virtual reality tools to enhance the research and outreach of her wheat quality and carbohydrate chemistry program.

Simsek often meets with various trade teams and farmer groups, and visits K-12 schools. Now, she can utilize VR technology to show what type of research she is conducting at NDSU. “Leveraging virtual reality helps enhance the research and outreach experiences for the people we work with,” she says.

Simsek implemented the browser-based 3D experience during this year’s Hard Red Spring Wheat Crop Quality meeting. Incorporating the 3D tour experience at the virtual crop quality meetings was met with great appreciation by the attendees.

“Virtual reality is offering some promising benefits to our research and outreach capabilities,” says Simsek. She believes the trend will not slow down any time soon, so researchers and other should expect to see more virtual reality technology enter their lives and laboratories in the future.

Dr. Simsek contributed this article to Wheat Letter, with editing support from Kamie Beeson, North Dakota State University. In addition, Dr. Simsek recently recorded two video presentations on how U.S. hard red spring (HRS) wheat can reduce the need for additives in a “Clean Label” end-product, and on 2020 U.S. HRS Crop Quality.

January 14, 2021/by actualize

South America, USW Announcements

Sonia Muñoz Retires from U.S. Wheat Associates after 39 Years

After spending 2020 celebrating its 40th anniversary, U.S. Wheat Associates (USW) ended the year saying a fond farewell to a colleague who was with the organization almost from the beginning. Ms. Sonia Muñoz retired from her Regional Program Director position at the USW Santiago Office after 39 years.

“Sonia has managed the South American regional programs efficiently and in a professional manner,” said Miguel Galdos, Regional Director, USW Santiago Office. “Starting 39 years ago with USW as a Secretary/Receptionist, she assumed greater responsibilities over the years due to her abilities and outstanding performance. Her good nature and dedication to her job was present always.”

Sonia Muñoz in 1989 with Luisa Tornero, former USW Executive Secretary, enjoying our working time.

During her time with USW, Muñoz was responsible for planning and executing various market development programs, seminars and other activities, arranging travel logistics, collaborating with colleagues on reports, and more. During her long career, Muñoz says the most notable change she saw was in the way people communicated and utilized technology.

1981 – My first year at USW at a Crop Quality Seminar.

“I started when the typewriter and the Telex were in vogue, so to be a secretary in that time was a challenge. We sent large amounts of mail through the post office and email wasn’t even in our imagination,” said Muñoz. “The first computer we had was the ICOM, which we used to send direct messages to the USW Headquarters Office. Through the years, I saw how distances were closer thanks to technological advances in communication.”

Past USW Regional Vice President, Alvaro de la Fuente worked closely with Sonia until his retirement in 2018.

“Sonia was always willing to go the extra mile for the organization’s benefit and had no problem in taking on added responsibilities. Her spirit of loyalty and hard work was recognized over the years and her good nature and friendliness contributed substantially to making the USW Santiago Office environment one that was extremely pleasant to work in,” said de la Fuente. “I can vouch for that, having worked with Sonia for thirty-eight years. I wish her a very happy and much deserved retirement.”

At a farewell dinner for Luisa Tornero, former USW Executive Secretary (left), with Alvaro De La Fuente, former USW Regional Vice President, (middle) and Sonia Muñoz (right) in 1994.

Muñoz says what she enjoyed most about working at USW was the opportunity to grow and develop as a professional and the wonderful people she worked with over the years.

“I am proud and happy that I was privileged to work for this great organization. This experience was one the best things I’ve had in my life. I have worked with excellent professionals and wonderful people and many of them have become good friends. I will keep very good memories of these years,” said Muñoz. “My special thanks to Mr. Alvaro de la Fuente, my former boss for his guidance, trusting me and giving me the opportunity to show my abilities. I would also like to thank my colleagues over the years who enriched me in so many ways. Miguel Galdos, Casey Chumrau, Andres Saturno, Claudia Gomez and Osvaldo Seco, I will miss working with you and the experiences we shared, and specially to my dear friend Paola Valdivia, with whom I shared so much with over the years. To María Fernanda Martinez who will replace me, I wish all the best.”

USW program staff visiting headquarters in 2005

Several USW program staff from overseas visit the USW Headquarters Office in Washington, D.C., in 2005.

In her retirement, Muñoz says she plans to seize and enjoy the things she now has time for, and that now that her kids are also grown, she plans to dedicate time for herself.

All of us at U.S. Wheat Associates thank Sonia for her work and friendship and wish her and her family a long and happy retirement.

Sonia Muñoz with several members of her family.

Header Photo: Current USW Santiago Office staff (left to right); Osvaldo Seco (Assistant Regional Director), Paola Valdivia (Finance Manager), Sonia Muñoz (Retiring Regional Program Director), Andres Saturno (Technical specialist), Claudia Gomez (Marketing Manager) and Miguel Galdos (Regional Director).

January 13, 2021/by actualize