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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.” USW activities are funded by producer checkoff dollars managed by 18 state wheat commissions and USDA Foreign Agricultural Service cost-share programs. For more information, visit www.uswheat.org or contact your state wheat commission. Stakeholders may reprint original articles from Wheat Letter with source attribution. Click here to subscribe or unsubscribe to Wheat Letter.

In This Issue:
1. Global Wheat Production to Fall in 2016/17
2. Trade Negotiation Focus Turns to T-TIP
3. Wheat Quality Council Tour See Upside HRW Yield Potential
4. Executive Assistant Joins U.S. Wheat Associates in Taipei
5. Mapping Wheat Ancestors’ Genomes to Implement Valuable Traits
6. Wheat Industry News

Online Edition: Wheat Letter – May 5, 2016 (See attached file: Wheat Letter - May 5, 2016.pdf)

USW Price Reports: http://www.uswheat.org/prices


1. Global Wheat Production to Fall in 2016/17
By Stephanie Bryant-Erdmann, USW Market Analyst

While farmers are busy with spring planting, organizations and agencies around the world are calculating the potential result of the farmers’ hard work. On May 10, USDA will release its World Agricultural Supply and Demand Estimates report with the first forecast for the 2016/17 marketing year. However, several key agricultural organizations have already made projections that, also considering crop conditions, provide a preview of what USDA might say next week.

On April 28, the International Grains Council (IGC) updated its 2016/17 wheat production estimates and provided a look at what marketing year 2016/17 may have in store. Due to reduced planted area, IGC pegged 2016/17 U.S. wheat production at 52.8 million metric tons (MMT), down 5 percent from 2015/16. As of May 1, USDA reported 61 percent of U.S. winter wheat is in good to excellent condition compared to 42 percent at the same time last year. USDA rated 7 percent of winter wheat in poor condition, compared to 20 percent in 2015, and estimated that 42 percent of winter wheat had headed, compared to the 5-year average of 34 percent. U.S. spring planting is 54 percent complete. That is behind last year’s pace but ahead of the 5-year average of 39 percent. USDA pegs spring wheat emergence at 22 percent compared to the 5-year average of 14 percent.

Canadians are also planting spring wheat into generally adequate soil moisture, though dry conditions are developing along Canada’s southern border. According to a StatsCan survey, Canadian farmers intend to plant 6 percent less spring wheat this year due to increased competition from durum, pulses and oilseeds. StatsCan estimates spring wheat area at 6.50 million hectares (16.0 million acres) and expects total planted area to fall 1 percent year over year to 9.64 million hectares (23.8 million acres). This includes 2.48 million hectares (6.12 million acres) of durum, a 5 percent increase from last year spurred by high durum prices and low stocks. According to Agriculture and Agri-Food Canada, its 2016/17 winter wheat area, especially soft red winter wheat in Ontario, returned to average levels. Winter wheat area for 2016 is 681,000 hectares (1.68 million acres), or 7 percent of the total estimated wheat area. Despite the lower planted area, IGC predicted total 2016/17 Canadian wheat production would reach 29.5 MMT, up from 27.6 MMT last year.

European Union (EU) farmers also planted slightly less wheat for 2016. Strategie Grains estimated EU soft wheat planted area at 24.0 million hectares (59.3 million acres) compared to 24.1 million hectares (59.5 million acres) in 2015. According to IGC, winter wheat field conditions in the EU’s three largest wheat-producing countries — France, Germany and the United Kingdom — are “particularly good.” However, uncertainty about Poland’s winter wheat persists after dry sowing conditions slowed plant development and left the wheat vulnerable to a December freeze. Strategie Grains estimated winterkill damaged 7 to 10 percent of Polish winter wheat and pegged its 2016/17 winter wheat production at 10.6 MMT, down 3 percent from 2015/16. IGC expects EU wheat production to dip to 152 MMT, down 7 percent from last year’s record but still well above the 5-year average.

IGC also expects Black Sea (Kazakhstan, Russia and Ukraine) wheat production to decline to 94.0 MMT, down 8 percent year over year. UkrAgroConsult expects Ukraine will show the largest decrease because dry conditions last fall cut planted area by 12 percent year over year. Winter wheat accounts for 95 percent of Ukrainian wheat production and recent rain improved crop conditions there. The same rainfall and favorable temperatures also benefited Kazak and Russian winter wheat, which UkrAgroConsult noted is in generally good condition.

Winter wheat planting only recently began in the Southern Hemisphere. According to ABARES, Australia received beneficial moisture last week, which improved soil conditions across major wheat producing areas. IGC expects Australian wheat production to reach 25.0 MMT, up from 24.2 MMT in 2015.

In Argentina, heavy rains delayed soybean harvest but provided beneficial moisture across the country. IGC expects Argentine planted area to increase to a 9-year high of 5.2 million hectares (12.8 million acres). IGC forecasts Argentine wheat production will jump to 14.6 MMT, up 30 percent from 2015 due to the Macri government’s more favorable farm policies.

Overall, IGC expects global wheat production to fall from a record 734 MMT set in 2015/16 to 717 MMT, which would be the third highest on record and on par with 2013/14 production.


2. Trade Negotiation Focus Turns to T-TIP
By Dalton Henry, USW Director of Policy

U.S. trade negotiators are now focusing more and more on the Transatlantic Trade and Investment Partnership (T-TIP), a proposed free trade agreement between the United States and the EU. T-TIP negotiations started in 2013 and maintained a relatively slow pace until last fall when negotiators completed the 12-country Trans-Pacific Partnership (TPP) now awaiting congressional ratification.

Last week, government representatives met in New York for their thirteenth round of T-TIP negotiations that included stakeholder comments. While both governments praised the progress to date and expressed optimism at possibly finalizing an agreement this year, significant differences remain with increased pressure to complete an agreement before the end of President Obama’s administration. In particular, the two sides seem to have significant gaps to bridge on key agricultural issues.

Due to fears that negotiators could strike a narrower agreement without resolving those agricultural issues, a bipartisan group of 26 senators is calling for agricultural issues to remain a priority. Their recent letter highlighted the need for broad-based tariff elimination, science-based approaches to animal and plant health issues and the improvements to the troublesome EU regulatory framework for approval of biotechnology products.

U.S. wheat exports currently face a complex “margin of preference” program that allows only high protein wheat and durum into the EU duty free, as long as world prices remain above a certain threshold. USW supports a comprehensive T-TIP agreement that eliminates all wheat duties, contains a fully enforceable sanitary and phytosanitary (SPS) chapter and provides for a predictable biotechnology approval process. USW established a full T-TIP priorities document as negotiations began three years ago.

As two large wheat producers and exporters, the United States and the EU are unlikely to see major trade shifts in wheat because of T-TIP. However, the agreement does have the potential to expand access for U.S. producers to the world’s largest agricultural importer and to establish key precedents for future trade agreements.

Agricultural issues are far from the only remaining sticking points. Significant differences remain in automobile market access, the creation of an investor-state dispute settlement (ISDS) mechanism and access to government procurement programs. According to the schedule, negotiators will take stock of progress in late May, with another formal round likely in July.


3. Wheat Quality Council Tour See Upside HRW Yield Potential

What a difference a year makes. This week the Wheat Quality Council’s annual “Hard Red Wheat Tour” hit the road again to survey the Kansas crop, measuring yield potential and scouting conditions. This time last year, the tour participants estimated yield at a lower than expected 35.9 bushels per acre (bu/ac). In contrast, this year’s tour saw much better field conditions and projected higher yields.

Tour participants come from as far as Australia and represent all facets of the wheat industry, including millers, traders, media, farmers, researchers and government officials. USW sent two colleagues on the tour this year: West Coast Office Assistant Director Shawn Campbell and Policy Specialist Elizabeth Westendorf.

Just a few hours before USW published this issue of “Wheat Letter,” the tour estimated a final average yield potential of 48.6 bu/ac or about 3.27 MT per hectare for the 2016/17 Kansas hard red winter (HRW) crop. This year the tour participants made 655 stops to scout fields. Combining seeded area with per-acre yield potential, the total production potential estimate was 382.4 million bushels (10.4 MMT). Last year’s total production estimate was 288.5 million bushels (7.85 MMT).

On the first day, starting in Manhattan, the tour traveled along several routes covering most of Kansas’ northern counties. The cumulative Day 1 average yield potential was 47.2 bu/ac, which is equivalent to about 3.15 MT per hectare, compared to 34.3 bu/ac in 2015. To reach that average, participants surveyed 306 fields — a tour record for a single day — with fields ranging from a low of 21 bu/ac to a high of 93 bu/ac. Pressure from stripe rust, wheat streak mosaic and barley yellow dwarf foliar diseases was evident. It was apparent that many farmers used preventive control measures, as untreated fields were visibly poorer. Kansas Wheat Commission CEO Justin Gilpin said that more farmers are protecting their wheat with fungicides this year because of last year’s disease damage and because the recent influx of moisture created optimal conditions for diseases to develop.

Participants also received a report on the Nebraska and Colorado wheat crops. Nebraska estimated an average 55.0 bu/ac for a total production estimate of 70.4 million bushels (1.92 MMT). Colorado estimated an average of 39.0 bu/ac with total production estimated at 78.0 million bushels.

On the second day, the tour traveled on routes that led from the city of Colby to Wichita, making 300 stops. Again, field conditions varied by route, but the crop was noticeably better than last year. Wheat streak mosaic was more prevalent on Day 2, and participants reported seeing barley yellow dwarf, leaf rust and stripe rust. However, farmers were keeping aerial applicators busy to stay ahead of disease pressure. The Day 2 estimated average yield was 49.3 bu/ac (3.31 MT per hectare), for a combined two-day average of 48.2 bu/ac across 606 stops. Last year, the Day 2 average was 34.5 bu/ac and the combined two-day average was 34.4 bu/ac. This was the highest Day 2 average estimate the tour has seen since 2012.

Participants also received a crop report from Oklahoma, where low cash prices encouraged more cattle grazing on wheat this year. The estimated average yield in Oklahoma is 33.6 bu/ac, for a total production estimate of 128 million bushels or about 3.48 MMT. The crop development is well ahead of normal with farmers expecting to start harvest at the end of May.

The third and final day of the tour was shorter, with each car making 3 to 4 field stops on the way from Wichita back to Manhattan for the final report. The Day 3 estimated average yield was 53.5 bu/ac, (3.51 MT per hectare) across 49 stops.

Fields throughout the tour exhibited signs of early season drought stress, but in many cases, the right amount moisture in April came just in time to save the crop. While weather can still massively effect these estimates in the upcoming weeks, they highlight what a difference a year can make.

“The wheat tour is a valuable experience not only because you get in the field and look at the crop up close, but also because of the connections you make. These are aspects of the industry that you don’t always get to see when you are in the office,” said Westendorf, who was a first time participant on the tour. “Now I have a better understanding of the hard decisions that farmers have to make and the challenges they face growing wheat. It reinforced that the United States indeed produces high quality wheat.”

View highlights and photos from the tour by searching #wheattour16 on Facebook and Twitter. The WQC also sponsors a spring wheat tour in the Northern Plains in July. For more information, visit the Council’s web site at http://www.wheatqualitycouncil.org.


4. Executive Assistant Joins U.S. Wheat Associates in Taipei

USW has hired Fiona Lee as Executive Assistant and Accountant in the organization’s office in Taipei, Taiwan. Ms. Lee will train with long-time Office Manager/Accountant Serena C. Wu, who plans to retire later in 2016.

“Fiona’s work experience ranges from financial project management to legal matters and translation needs,” said Matt Weimar, USW’s Regional Vice President for South Asia. “These are strong assets that will certainly benefit the U.S. wheat farmers we represent and our industry and government partners in Taiwan.”

“We knew we had a difficult job to eventually replace Serena Wu,” said Ronald L. J. Lu, USW’s Country Director for Taiwan. “Serena has served this organization and our customers faithfully for more than 38 years. With her guidance over the next several months, though, we are sure Fiona will be well prepared for another long and successful tenure with U.S. Wheat Associates.”

Ms. Lee comes to USW after serving as a clerk and English secretary at a Taipei law firm and as an executive assistant at Henkel Taiwan, a large industrial products company. She worked as an investment manager with Uni-President and at the consulting firm KPMG Taipei, she served on corporate finance teams related to merger and acquisition projects as well as in corporate finance risk management. Ms. Lee has a bachelor’s degree in journalism from National Cheng-Chi University, Taipei and a master’s degree in finance from George Washington University, Washington, DC. She is fluent in Mandarin and English.

Taiwan is on average the sixth largest market for U.S. wheat, purchasing more than 15 million metric tons (more than 550 million bushels) since 1998. In each of the past two marketing years, Taiwan’s flour millers purchased about 1.0 million metric tons (MMT), or nearly 37 million bushels, of U.S. wheat. Significant hard red spring (HRS) imports reflect a need for strong gluten flour for breads, rolls and frozen dough products as well as for blending with hard red winter (HRW) to make traditional Chinese flour foods and noodles. Soft white (SW) imports, including Western White (a blend of SW and up to 20 percent club), help meet growing demand for cake, cookie and pastry flours.

USW Taipei works directly with end users and importers to help them strengthen commercial links with U.S. export companies through trade serving and technical assistance activities managed by Ron Lu and Ms. Shu-ying Yang, Asian Products/Nutrition Specialist, and by facilitating customer visits to the United States.


5. Mapping Wheat Ancestors’ Genomes to Implement Valuable Traits
Reprinted with Permission from the Kansas Wheat Commission; Story by Audrey Schmitz

If there is one thing Kansas farmers understand, it is unpredictability. Unpredictable crop conditions keep farmers on their toes, but what if those farmers had drought tolerant wheat, or maybe even wheat with resistance to common pests?

Kansas wheat farmers are funding research into this resiliency through their investment in the Kansas Wheat Commission. Eduard Akhunov, associate professor in plant pathology at Kansas State University, has been dedicating his time to creating markers for wheat ancestor species genomes to identify valuable genes like these, which could improve wheat’s resiliency.

Wild relatives of wheat have valuable genes that have resistance to pests, pathogens and stress factors such as temperatures, drought or wind, said Akhunov. However, access to these useful genes in wheat breeding programs is limited because they have not been identified or marked.

“We are trying to use some useful genes that are found in wild ancestors of wheat by transferring them [through breeding] to wheat and then actually putting them into the field,” he said.

According to Akhunov, they characterize a diverse collection of wild ancestors and relatives of wheat in collaboration with colleagues from the Wheat Genetics Resources Center, Department of Agronomy and the KSU Integrated Genomics Facility.

“In total, currently we have characterized 30 species. We have used next-generation sequencing technology to sequence their genomes and gather molecular information for all genes in each of these grass species,” said Akhunov.

For plant research, exploring a plant’s genome is key. The genome sequence is like a map, and genes and other functional pieces of genetic code are the landmarks, roads and towns that bring the big picture together. Akhunov’s team first developed a database of functionally important genome sequences of the wild relatives of wheat using high throughput DNA sequencing technology combined with a process called sequence capture. Sequence capture allows for only the functional portion of the plant's genome to be examined for genetic variation.

According to Akhunov, molecular markers are used to mark variations in genome sequences of DNA. These markers allow researchers to pinpoint exactly where in the genome the exact gene for a specific resistant or high-yielding trait is located, much like symbols you will see on a map differentiating hospitals from tourist attractions. If researchers find the marker in a genetic sample, they know that the gene is present, long before it would have been expressed when planted in a test plot.

Akhunov said that the project so far has taken about three years and will still need about one year to be fully completed. He said his team has completed making markers for almost all the wild relatives and completed generating all the data. The next step in the project is to convert these markers into easy-to-use assays that will allow characterizing large number of wheat lines at low cost.

“Starting next year, we will start putting plants developed using some of these sequenced ancestors into the field,” said Akhunov. “With our K-State collaborators we will start phenotyping them for drought, disease resistance, and for all the traits. This kind of data will help us to identify genes that control these traits.”

Editor’s Note: Similar work is underway at many public and private research organizations, such as this one in the United Kingdom: New Gene-Detecting Technology Developed at the John Innes Centre.




6. Wheat Industry News
  • Wheat Quality Council (WQC) Executive Vice President to Retire. When the popular HRW wheat tour launched from Manhattan, KS for its annual crop-scouting caravan on May 2, organizer Ben Handcock said it would be his last time on the Kansas tour, after recently announcing his retirement. While the tours are a relatively small part of the work the WQC does, they draw considerable attention and publicity. “It’s been 25 years since we started doing this,” said Handcock. “When we started, we had 28 people and now it’s close to 100, depending on crop conditions.” Handcock has spent a lifetime following the highs and lows of the annual wheat crop. He grew up on a 15,000-acre wheat farm in South Dakota and continued farming for several years, then joined the South Dakota Wheat Commission before moving to his current role at the WQC “I’m going to miss the tours the most. That’s been a lot of fun,” he said. “You get to meet so many people. It’s just incredible.” USW extends its appreciation to Ben for his many years of service to the U.S. wheat industry. Read the full article from “Ag Journal” here.
  • Congratulations to Adam Kiely on 20 Years of Service. Adam is the Senior Staff Accountant in the USW Headquarters Office in Arlington, VA. We are so fortunate that it is not rare to have such devoted, loyal colleagues at USW. Thank you for your years of service to our organization, to U.S. wheat farmers and to our customers around the world!
  • WQC Seeks New Leadership. The WQC is searching for an individual with a passion for the wheat industry and proven industry leadership experience. Please email a letter of application and resume by May 31, 2016 to Ben Handcock at bhwqc@aol.com or call 303-558-0101 for more information. The position starts in November 2016. Read the full job description here.
  • Wheat Marketing Center Advanced Asian Technology Course. This hands-on course is scheduled for June 6 to 10, 2016. For more information, please visit http://wmcinc.org.
  • Register Now for the Buhler-KSU Executive Milling Course. Kansas State University's IGP Institute, in conjunction with Buhler, Inc., will host its Buhler-KSU Executive Milling course June 13 to 17, 2016 at the IGP Institute Conference Center in Manhattan, KS. Course topics include raw materials, cleaning systems, milling systems, finished product handling and storage, performance evaluation in a flour mill and factors that influence an investment decision and basics in aspiration. Also included will be hands-on exercises demonstrating the influences of wheat characteristics on yield and mill performance, special systems for mycotoxin reduction and top quality flour production, machine and flow sheet technology, system design and various tempering philosophies. For more information and to register, visit www.iaom.info.
  • Subscribe to USW Reports. USW has added a “Subscribe” menu at www.uswheat.org where visitors may subscribe to this newsletter, the weekly Price Report and the weekly Harvest Report (available May to October.) Click here to subscribe.
  • Follow USW Online. Visit our page at www.facebook.com/uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter.com/uswheatassoc, additional photos at www.flickr.com/photos/uswheat, plus video stories at www.youtube.com/uswheatassociates.

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