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U.S. Wheat Associates (USW) is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” The activities of USW are made possible by producer checkoff dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit or contact your state wheat commission. Original articles from Wheat Letter may be reprinted without permission; source attribution is requested. Click here to subscribe or unsubscribe to Wheat Letter.

In This Issue:

1. USDA Offers Bearish U.S. Wheat Forecast
2. Australian, Canadian and U.S. Groups Reconfirm Commitment to Innovation and Biotechnology in Wheat
3. U.S. HRW Fills a Gap for Brazilian Flour Millers

4. California Wheat Farmer Installed as USW Chairman
5. National Festival Highlights Wheat
6. United States Increases Funding for Waterway Development Projects
7. Wheat Industry News

Online Edition: Wheat Letter – June 14, 2014 (

USW Harvest Report:

PDF Version: (See attached file: Wheat Letter - June 12, 2014.pdf)

1. USDA Offers Bearish U.S. Wheat Forecast
By Casey Chumrau, USW Market Analyst

USDA’s first monthly World Agricultural Supply and Demand Estimates (WASDE) report of marketing year 2014/15 released June 11, 2014, seemed to support assertions that the U.S. is the only major wheat producing country with weather challenges this year. USDA lowered its projected 2014/15 U.S. production from last month but increased its global estimate. The agency attributed both adjustments to weather.

USDA reduced total projected U.S. wheat production for 2014/15 by 500,000 metric tons from May to 52.9 MMT. If realized, it would be 9 percent lower than last year and the smallest output since 2006/07. The outlook for spring wheat is quite positive, but USDA expects a below-average winter wheat harvest leading to lower overall production.

Even though it is finally raining in much of the southern and central U.S. plains, the drought took its toll on hard red winter (HRW) conditions. In a monthly crop production report also on June 11, USDA lowered its HRW forecast by 3 percent from last month to 19.6 MMT. If realized, it would be 19 percent lower than last year’s already below-average crop and the smallest HRW harvest since 2006/07.

Dry weather in the Pacific Northwest also threatens the region’s white wheat crop. USDA pegged winter white wheat production at 5.61 MMT, down 1 percent from last month and down 8 percent from 2013/14. USDA increased its soft red winter (SRW) projection from last month to 12.4 MMT, which would be 9 percent greater than the five-year average but still 20 percent below last year’s sizable crop. USDA will release its first production estimates of spring wheat classes on July 11, 2014.

Higher estimated U.S. beginning stocks at 16.1 MMT this month could not offset the lower production estimate, leaving total 2014/15 U.S. supply down 310,000 MT to 73.3 MMT, compared to 82.1 MMT in 2013/14. With lower available supplies and increased production by competitors, USDA reduced expected U.S. exports from 25.9 MMT in May to 25.2 MMT. USDA pegged total world exports at 152 MMT, the third highest of all time.

Despite a small decrease in global beginning stocks, USDA boosted projected global wheat supplies by 4.1 million to 888 MMT thanks to a 5.2 MMT increase in production outside the U.S. USDA now expects 2014/15 world wheat production to reach 702 MMT. If realized, it would be 2 percent lower than last year’s record output but only the second time world output topped 700 MMT. The largest month-over-month increase was 1.85 MMT in India, where USDA now expects the country will set a new production record of 95.9 MMT, up 3 percent from last year and besting the previous record of 94.9 MMT set in 2012/13. USDA left India’s projected exports at 3.5 MMT, well below the more than 6.0 MMT exported each of the last two years but still well above the five-year average of 2.77 MMT.

The largest increase over the May production estimates of major exporters was 1.37 MMT in the EU. USDA expects total EU production to reach 146 MMT, up 2 percent from last year and 6 percent higher than the five-year average. Early spring and summer rainfall have significantly increased yield potential in France and Germany. The European Commission this week raised its forecast for 2014/15 soft wheat crop to 137 MMT from 133 MMT previously. Germany’s farm cooperatives increased their forecast this week for 2014/15 output to 25.5 MMT, 2 percent greater than last year. USDA estimates the EU will export 28.0 MMT, which would be the second most behind last year’s 30.0 MMT.

USDA raised its Russian production forecast by 1.0 MMT to 53.0 MMT based on favorable growing conditions. Although Russia's Institute for Agricultural Market Studies (IKAR) arrived at the same forecast number, it reduced its estimate from 54.5 MMT last month after a crop tour observed dry conditions in the country’s wheat-growing belt. However, IKAR added that timely rains in the next few days would significantly boost production potential just ahead of harvest. USDA increased estimated Russian exports by 500,000 MT to 19.5 MMT because of the larger expected production and competitive prices, which would be 5 percent higher than last year and 32 percent greater than the five-year average.

Weather has been more favorable in Ukraine and IKAR expects a large grain harvest. IKAR noted that farmers there applied one-third less fertilizer than last year, which could affect production and quality. USDA left Ukrainian production unchanged from last month at 20.0 MMT, down 10 percent from last year but slightly higher than the five-year average. Ukrainian exports were also unchanged at 8.5 MMT, which would be 1.0 MMT lower than last year but 20 percent great than the five-year average.

In May, USDA forecasted global consumption at 696 MMT. It added 3 MMT to that forecast this week due to increased wheat feeding China and the EU. The increased consumption forecast mostly offset higher expected production. It left ending stocks just 1.19 MMT higher at 189 MMT, up 1 percent from last year and 2 percent below the five-year average.

Although USDA did not change its global supply and demand outlook much this month, once again, weather is proving to be the key factor shaping the world’s wheat market. Most major producers hope their luck does not change while many U.S. farmers are still looking to the skies for a shift in their fortunes.

To see the latest USW Supply and Demand Report, click here.

2. Australian, Canadian and U.S. Groups Reconfirm Commitment to Innovation and Biotechnology in Wheat

Sixteen organizations in Australia, Canada and the United States, representing producers and millers, together publicly confirmed support for innovation in wheat, including the future commercialization of biotechnology June 5, 2014. The statement, which lays out shared commitments for the responsible advancement of biotech traits and other breeding advancements in wheat, comes five years after an original document was signed. This new pledge welcomes the addition of broad-based groups like the American Farm Bureau Federation and the National Farmers Union to a wide coalition of wheat organizations in the three countries.

The signatories call for further innovation in research as wheat represents about 20 percent of human calorie intake, making it an essential part of the global diet and critical to food security. As demand increases, they state, wheat supplies must remain abundant while meeting the highest quality and nutrition standards. Advanced breeding and biotechnology will help protect the continued availability of wheat foods and “ultimately offers the promise of improved products, more sustainable production and environmental benefits,” according to the statement.

The groups also encourage the governments of wheat producing and importing countries to maintain sound, science-based regulatory systems as well as to adopt reasonable low-level presence policies to minimize trade disruptions. For the same reason, the groups stated they will work toward the goal of synchronized commercialization of biotech traits in wheat in the three countries. Similarly, they reiterate that customer choice is paramount: “We stand ready to assist all industry segments to assure supplies of non-biotech wheat within reasonable commercial tolerances to markets that require it.”

U.S. organizations signing onto the statement include:
  • American Farm Bureau Federation
  • National Association of Wheat Growers
  • National Farmers Union
  • North American Millers’ Association
  • U.S. Wheat Associates

Canadian signatories:
  • Canadian National Millers Association
  • Cereals Canada
  • Grain Farmers of Ontario
  • Grain Growers of Canada
  • Western Canadian Wheat Growers Association

Australian signatories:
  • AgForce Queensland
  • Grain Growers Limited
  • Grain Producers Australia
  • Grain Producers SA
  • Pastoral and Graziers Association of Western Australia
  • Victorian Farmers Federations Grains Group

The full statement is available online at and

3. U.S. HRW Fills a Gap for Brazilian Flour Millers

For the first time in decades, Brazil imported more U.S. wheat than any other country in the 2013/14 marketing year that ended May 31, 2014. Looking ahead, a logical question is whether Brazil will continue buying more U.S. wheat now that the door of opportunity is open. The answer, according to a high-volume wheat buyer, is “yes” — at least until the quality of Brazil’s large 2014/15 crop and Argentina’s production are known.

Brazil’s average annual wheat imports of around 7.1 MMT make it one of the world’s top wheat buyers. Wheat produced in Brazil is soft to semi-hard and millers need to blend it with higher protein hard wheat to produce flour with the characteristics to make Brazil’s preferred French-style bread products. Brazil used to originate most of that wheat from the United States before the Mercosur free trade agreement in South America allowed millers to import Argentine wheat duty free, while established a tariff on wheat from non-Mercosur countries like the United States.

Brazil's government was applying the tariff at 10 percent of the FOB price in 2012/13 when it became clear that Argentina’s wheat production was poor and the Argentine government severely restricted wheat export licenses. Brazilian millers successfully petitioned their government to suspend the tariff and USW provided the information millers needed to turn to U.S. wheat.

“I want to congratulate you and the state wheat commissions represented here for doing such a good job helping our flour millers last year,” said Edson Csipai, the head wheat buyer with Bunge Alimentos in São Paulo, Brazil, on June 10, 2014, at the U.S. Wheat Associates (USW) board of director’s meeting in Omaha, NE. He also noted that until millers know the quality of this year’s Brazilian wheat crop — and whether Argentina can deliver sufficient supplies — he expects Brazil will need at least 1.3 MMT of HRW in the first half of 2014/15. That would be nearly 37 percent more than Brazil’s five-year average annual U.S. wheat imports. In 2013/14, however, Brazil's millers imported almost 4.3 MMT of U.S. wheat, the majority of which was HRW.

Csipai was in the United States as part of a trade team of Brazilian millers who visited farms in Maryland and Kansas, meeting with commercial elevator managers and seeing the USDA grain inspection system. The trade team is one of several activities sponsored by USW and state wheat commissions to help Brazil’s millers fully understand the long-term value of the U.S. HRW and SRW supply.

“I certainly cannot suggest we will have problems getting wheat from Argentina again this year,” Csipai said. “But it has been raining quite a lot in the main wheat growing region there. It is good to know that farmers here in the United States always produce enough wheat and we can get the information we need from USW to buy what we need with confidence.”

4. California Wheat Farmer Installed as USW Chairman

Roy Motter, wheat farmer from Brawley, CA, took the reins as Chairman of the USW Board of Directors at the organization’s annual meeting on June 11, 2014, in Omaha, NE.

“Attending USW meetings and conferences in Latin America, South Asia and Europe, I am continually impressed by the quality of the USW staff and their work,” Motter said. “I am honored to continue representing all U.S. wheat farmers overseas, sharing the message that we grow the most reliable supply of high quality wheat in the world.”

Motter is managing partner of Spruce Farms, LLC, a diverse operation in California’s Imperial Valley that includes Desert Durum®, lettuce, cabbage, onions, sugar beets, sugar cane, alfalfa seed and hay, sudan grass, melons and tomatoes. He has been a member of the California Wheat Commission since 1998 and has served as president and vice president of the Stockman’s Club of Imperial Valley.

Other officers installed included Brian O’Toole (Crystal, ND) as Vice Chairman and Jason Scott (Stevensville, MD) as Secretary-Treasurer. Last year’s Chairman Dan Hughes (Venango, NE) transitioned to Past Chairman and Chairman of the USW Budget Committee. The USW directors elected them to these one-year positions at their meeting in January 2014.

5. National Festival Highlights Wheat

Wheat weavers, farmers, bakers, millers and educators will greet visitors to the United States Botanic Garden (USBG) in Washington, DC, on Saturday, June 14, 2014, as part of its Amber Waves of Grain Family Festival.

The Festival runs from 10:00 a.m. to 2:00 p.m. and highlights the USBG’s summer exhibit on the history and beauty of wheat. The festival includes hands-on activities for children, live wheat weaving, baking demonstrations, hand-crank flour mills and a tabletop threshing machine as well as a mixing activity illustrating the function of different wheat classes and flours.

In addition to USBG staff and volunteers, participating groups include farmers from Maryland and Kansas as well as representatives from the American Bakers Association, Home Baking Association, Kansas Association of Straw Artists, Kansas Foundation for Agriculture in the Classroom, Kansas Wheat Commission, Maryland Grain Producers Utilization Board, National Association of Wheat Growers, Nebraska Wheat Board, North American Millers’ Association, Wheat Foods Council and U.S. Wheat Associates.

The USBG will preview the main festival with baking demonstrations in the West Gallery from 10:30 a.m. to 3:30 p.m. on Friday, June 13, 2014.

The Amber Waves of Grain exhibit will continue to feature wheat until Oct. 13, 2014.

The exhibit also honors the addition of Dr. Norman Borlaug to the National Statuary Hall Collection in the United States Capitol on March 25, 2014, the 100th anniversary of his birth. In addition to the outdoor exhibit, a panel exhibit highlights Dr. Borlaug’s research.

The late Dr. Borlaug is credited with sparking the Green Revolution and saving more than 1 billion people from starvation through his development of high-yielding, semi-dwarf wheat. Borlaug was awarded the Nobel Peace Prize in 1970 for his work. Several Borlaug varieties are on display as part of the USBG exhibit.

6. United States Increases Funding for Waterway Development Projects

USW and the National Association of Wheat Growers (NAWG) welcomed the passage of the Water Resources Reform Act (WRRDA) of 2014 that President Barack Obama signed into law June 11, 2014.

"NAWG is pleased the president signed the Water Resources Reform and Development Act of 2014 into law today," commented NAWG President, Paul Penner, a wheat farmer from Hillsboro, KS. "This bipartisan bill signals how vital our inland waterways system is; both to America's wheat farmers and to our nation's economy as a whole. The bill also provides much needed regulatory relief for farmers by increasing the storage capacity for exemptions and self-certification for on farm aboveground storage tanks."

"As half of our nation's wheat crop is exported annually, wheat growers' livelihoods depend on modern, functioning U.S. ports and waterways," Dan Hughes, USW Past-Chairman said. "We applaud the Congress and President for coming together to maintain our nation's export competitiveness."

WRRDA seeks to increase funding for waterway development projects, such as deepening waterways and lock and dam repairs and upgrades. The bill is especially important to U.S. wheat farmers and their customers, who rely on many inland waterways, such as the Columbia River system in the Pacific Northwest, to help meet domestic and overseas demand for U.S. wheat.

7. Wheat Industry News
  • WMC Artisan Bread Baking Short Course. The Wheat Marketing Center in Portland, OR, will hold its Artisan Bread Baking Short Course June 16 to 20, 2014. For more information or to register, visit
  • IGP Milling Courses. The International Grains Program in Manhattan, KS, will have its Buhler-KSU Executive Milling Course in English July 7 to 11, 2014 and its Spanish version Aug. 11 to 15, 2014. For more information or to register, visit
  • NCI Rheology of Wheat and Flour Quality Course. The Northern Crops Institute in Fargo, ND will hold its Rheology of Wheat and Flour Quality short course July 15 to 17, 2014. For more information or to register, visit
  • FAS Foreign Service Officer Nominated as Ambassador. President Barack Obama announced he would nominate Allan Mustard as U.S. ambassador to Turkmenistan. Mustard is the current agricultural minister-counselor at the U.S. Embassy in New Delhi, India, and has previously held FAS foreign service positions in Mexico City, Mexico and Moscow, Russia.
  • Boroughs Joins NAMA. The North American Millers’ Association hired Ben Boroughs as the director of regulatory and technical affairs. Boroughs previously worked on agricultural issues for U.S. Senator Amy Klobuchar from Minnesota. He also completed internships with the Biotechnology Industry Organization and the American Society of Agricultural and Biological Engineers. For more information, visit
  • Welcome to Katie Heinrich, who recently joined the Texas Wheat Producers Board and Association as the director of communications and producer relations. Heinrich will be responsible for managing communications between producers and industry professionals as well as state and national partner organizations. For more information, visit
  • Thank you Matt King and welcome to Eric Branscum, who replaced Matt as the administrator of the Arkansas Wheat Promotion Board.
  • Congratulations to Andy Zhao, country director in the USW Beijing Office, on his 30th anniversary working for USW. Thank you for your service!

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