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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. Ukraine Unrest Gets Too Much Credit for Higher Wheat Prices
2. Wheat is Moving More Efficiently in the United States
3. Events Honor Centennial of Dr. Norman Borlaug’s Birth, Legacy
4. Borlaug Summit to Introduce New Wheat Yield Initiative
5. For the Rest of the Story, Follow Farmers Online this Wheat Growing Season
6. Wheat Industry News

Online Edition: Wheat Letter - March 20, 2014 (

PDF Edition: (See attached file: Wheat Letter - March 20, 2014.pdf)

USW Price Report:

1. Ukraine Unrest Gets Too Much Credit for Higher Wheat Prices
By Casey Chumrau, USW Market Analyst

Regular readers of the U.S. Wheat Associates (USW) Weekly Price Report have seen a month-long uptick in wheat futures prices. Each week, many headlines pointed to political instability in Ukraine as a key factor in the run-up. There is little doubt that the market was factoring in some concern over the political situation in a country that captured 6 percent of the world wheat market in 2013/14. But the primary fuel for a 15 percent increase in the Kansas City Board of Trade (KCBT) May hard red winter (HRW) wheat contract in just 13 trading days include real fears about droughts around the globe, potential freeze damage in the southern U.S. plains and position changes by the big index funds.

USW believes speculation and uncertainty are driving the market reaction about Ukraine. The facts seem to tell the story — at least for now.

All signs still point to normal export operations in Ukraine. The Ukrainian Agriculture Ministry released its monthly export report on March 19 showing no indication that grain shipments suffered in the last four weeks. Moreover, journalists from Ukraine report regular operations at export terminals on Ukraine’s mainland and the Crimean peninsula. The Ministry reported exports of 108,500 metric tons in March, bringing total exports since July to 7.49 million metric tons (MMT). Wheat export volume from Ukraine is typically lower this time of year as old crop supplies diminish. Adding in June 2013 exports of 129,000 MT reported by the Global Trade Atlas, Ukraine has already shipped more than 76 percent of the 10.0 MMT total USDA expects the country to export in 2013/14 (June-May). It is also important to note that a large percentage of Ukraine’s wheat exports are destined for feed use.

The location of Ukrainian ports puts grain logistics relatively far away from the current political situation. The Ukrainian agriculture ministry recently reported that grain from Crimea only account for about 7 percent of Ukraine’s total grain exports. That number was even lower in February, when grain exports through Crimean ports were just 3.6 percent of the total. Furthermore, the country’s biggest grain port of Odessa is about 180 km (112 miles) from the Crimea region, while the other major ports, Yuzhniy and Nikolaev, are more than 145 km (90 miles) away. The agriculture ministry also reported that other ports have more than enough capacity to handle shipment diversions from Crimea if necessary.

The political turmoil has not hindered old crop wheat sales so far and should not significantly disrupt or decrease 2014 new crop production. Financial fallout from the crisis could make spring planting difficult, but that represents only 5 percent of Ukraine’s crop, on average, so the majority of the crop will be ready for harvest in June or July. Crimea is not a major wheat-producing region so any lost planted area there would have little impact on global supplies.

There have been some reports that traders and customers are hesitant to enter into new contracts for Ukrainian wheat given the political and financial uncertainty. If it persists, a perception of higher risk could affect the global supply and demand balance, particularly into the 2014/15 marketing year. Global supplies are already tight due to record-breaking consumption four of the past six years. As it is in the United States, the real concern for the new wheat crop in Ukraine and southern Russia is drought.

Once more, we are reminded that in the world wheat market, precipitation is always more important than politics.

Regardless of what happens, the U.S. wheat store is always open. U.S. wheat farmers have always produced enough wheat to supply the domestic market and still make half their crop available to the world and the U.S. wheat supply chain is always ready to help customers with both planned and unforeseen demands.

2. Wheat is Moving More Efficiently in the United States
By Shawn Campbell, USW Assistant Director, West Coast Office

While logistical problems continue to hurt farmers and delay grain movement to export facilities in Canada, similar challenges in the United States appear less disruptive as U.S. railroads have more flexibility to respond to market demand. And that is helping build confidence that the United States remains the most reliable wheat supplier in the world.

Canadian farmers produced record wheat and canola crops in 2013/14. But after seeing their highest monthly grain exports in 10 years in October and November, they began seeing the backlog all but dry up the cash market for old crop grain. The situation has not improved in March at a time when many farmers need to sell grain to help finance new crop inputs.

According to the Western Grain Elevator Association, early this month 53 vessels were waiting to load at British Columbia’s Vancouver and Prince Rupert ports. Additionally, 60,000 railcars, representing a volume of 5.4 MMT of grain, are behind schedule to be loaded, adding to an already difficult situation with some of the harshest winter weather in recent memory. For example, trains have had to haul fewer cars and run slower because temperatures repeatedly plummeted below -25 degrees Celsius (-13 degrees Fahrenheit).

Under this stress, grain companies and farmers see fault with the Canadian National and Canadian Pacific railroads. For their part, the railroads claim they are hauling more grain than ever before and attribute problems to elevator inefficiencies, bad weather and the record Canadian grain crop.

On March 7, the Canadian government had its say by ordering the railroads to jointly increase grain movements within four weeks or face significant fines. The railways say they will most likely be unable to reach that goal until the Lake Superior port of Thunder Bay opens again for grain exports, possibly by early April. Until then, rail shipments to eastern export terminals have to make a much longer journey, limiting railcar movements and locomotive availability. For similar reasons, the railroads have already limited grain shipments to the United States. This has roiled the North American oat market but may have limited movement of wheat south across the border. While the Canadian government’s goal may be achievable, many analysts wonder if it would negatively affect service for other rail-dependent industries.

As Canada faces its challenges, the movement of grain across the northern United States to export terminals in the Pacific Northwest (PNW) is dealing with similar issues. Large crop volume, strong overseas demand, competition with other commodities and increased export capacity combined to create a shortage of railcars and locomotives. Yet the United States is generally moving grain more efficiently. For example, grain railcar deliveries to the PNW set decade highs from October through January and PNW grain export volume remains close to its November peak.

Much of this performance can be attributed to a less regulated U.S. rail system. U.S. railroads offer more flexible forward contracting for grain railcar orders compared to their Canadian counterparts. Grain companies in the United States may also buy and sell these forward contracts with each other in a secondary market that increases the overall system efficiency. Therefore, while U.S. grain companies may have to pay a premium, they can still guarantee on-time delivery when needed.

Some U.S. rail carriers also recently announced major new investments to deal with this year’s backlogs and help minimize similar problems in the future. For example, BNSF, the largest rail carrier in the northern U.S. states, announced in February a $5 billion capital investment for 2014, including 500 new locomotives.

The latest estimates by the BNSF predict that rail delays in the United States likely will clear up by June. In comparison, estimates by the Canadian National Railway project that that the rail backlog in Canada may not be fully fixed until 2015.

Chart Data Source: USDA-FGIS and Canadian Grain Commission

3. Events Honor Centennial of Dr. Norman Borlaug’s Birth, Legacy

One hundred years ago next Tuesday, March 25, Dr. Norman Borlaug, the Nobel laureate scientist who developed high-yielding, semi-dwarf wheat and is credited with sparking the Green Revolution and saving more than 1 billion people from starvation, was born on a farm near Cresco, Iowa.

To honor the man and his work, scientists will gather next week at the International Maize and Wheat Improvement Center (CIMMYT) in Ciudad Obregón, Mexico at the Borlaug Summit on Wheat for Food Security. They will report on progress in the fight against resurgent wheat rust, focus on wheat’s critical role in global food security and discuss ways to spark an “Evergreen Revolution.”

In the United States, a bronze statue of Dr. Borlaug will take its place Tuesday among 100 statues of notable Americans in National Statuary Hall of the U.S. Capitol (

It is fitting to honor Dr. Borlaug, who led a dedicated agricultural research team that, in partnership with local farmers, modified the genetics of wheat to produce new, rust-resistant varieties primarily for farmers in Mexico, India, Pakistan and Turkey. The work boosted yields, prevented a famine in South Asia and led to widespread adoption of improved crop varieties and farming practices. The Borlaug Summit next week includes many scientists who carry on Dr. Borlaug’s legacy, including two World Food Prize laureates: Dr. Robert T. Fraley, executive vice president/chief technology officer of Monsanto and Dr. Per Pinstrup-Andersen, a professor in the College of Human Ecology and the Division of Nutritional Sciences at Cornell University.

U.S. wheat farmers hope this spotlight on Dr. Borlaug’s work will draw attention to the continued need for wheat research and innovation. As CIMMYT notes, by 2050, world population will exceed 9.6 billion and demand for wheat, corn and rice is expected to increase by at least 60 percent. The world’s climate is changing; temperatures are rising in major wheat-growing areas and extreme weather events are becoming more common; natural resources are being depleted; new diseases are emerging; and yields are stagnating. In addition, increasing wheat demand from more people and changing diets pressure grain markets that can push up prices and disrupt free trade when bad weather or bad government policies threaten crops in wheat-producing nations.

Dr. Borlaug himself spoke often about the critical nature of these challenges up to the end of his life in 2009. That year, in a Wall Street Journal opinion editorial about the future of world food demand, he noted that wheat and rice research was not keeping pace with the double-digit productivity gains in corn and soybeans.

“Lack of significant investment in rice and wheat … is unfortunate and short-sighted,” Dr. Borlaug wrote in that article. “It has kept productivity in these two staple crops at relatively the same levels seen at the end of the 1960s and the close of the Green Revolution, which helped turn Mexico and India from starving net grain importers to exporters.”

Fortunately, farmers have helped turn the tide in wheat research. There is significantly more private and public investment today in developing new high yield, high quality wheat varieties. Scientists are employing conventional and new wheat breeding tools, including gene markers that help them select varieties with the best potential for crosses and doubled haploid technology that significantly speeds the development process.

Recombinant DNA research in wheat through biotechnology is another tool used by wheat breeders. Dr. Borlaug strongly supported biotechnology as a safe, efficient way to get advanced crop varieties into the field much faster than the conventional breeding he used in his work. In wheat, however, commercially approved traits derived from biotechnology will not be available for many years, in part because they are far more regulated compared to varieties developed in other ways. Another reason regulators are moving slowly is political pressure from opponents of this proven technology who exploit the fear of the unknown to make their case.

That is very unfortunate, noted environmental writer Mark Lynas in a recent interview.

“With biotechnology,” Lynas said, “humanity really may be forcibly prevented by fear, by misinformation from using a technology which can feed a growing human population and make agriculture much more sustainable.”

As the important anniversary of Dr. Borlaug’s birth approaches, U.S. wheat farmers and the representatives of USW affirm their commitment to help provide the information and facts the world’s wheat buyers need to understand the benefits of modern plant breeding. Together, we must also find ways to share this information with farmers, customers and consumers around the world — just as Dr. Borlaug did.

4. Borlaug Summit to Introduce New Wheat Yield Initiative

With a goal to raise the genetic potential of wheat yields 50 percent by 2035, a consortium of public organizations will launch the International Wheat Yield Partnership (IWYP) next week during the Borlaug Summit on Wheat for Food Security at CIMMYT.

The new initiative will evolve from the Wheat Yield Consortium established by CIMMYT in 2009. CIMMYT will act as host for IWYP but the program will operate as a separate entity with its own governance. Donors include CIMMYT, the Biotechnology and Biological Sciences Research Council (BBSRC), the U.S. Agency for International Development, the United Kingdom’s Department for International Development, Australia’s Grains Research & Development Corporation and the Syngenta Foundation for Sustainable Agriculture, with additional support from other international organizations.

CIMMYT says IWYP’s donors will work together with the private sector to form a strong, global public-private partnership focused on stimulating progress in wheat research and moving scientific discoveries into market-ready products for developing and developed nations.

According to Steve Visscher, BBSRC’s deputy chief executive and chief operating officer, “There are many ways we can increase wheat yield, such as improving wheat’s photosynthetic efficiency,” he said. “Wherever breakthroughs are found, they will be bred as rapidly as possible into elite, commercially viable seed by CIMMYT or other public sector breeding programs and by the private sector. Their potential will then be evaluated in relevant environments across the world and continually developed until those capable of achieving the desired yield gains can be released as finished varieties.”

For more information, visit

5. For the Rest of the Story, Follow Farmers Online this Wheat Growing Season
By Julia Debes, USW Assistant Director of Communications

What’s up with the U.S. wheat crop? That is a question traders, millers and bakers the world over are asking. While USDA’s National Agricultural Statistics Service has resumed its weekly Crop Progress and Condition reports, anecdotal evidence from farmers across the country gives an added perspective to the statistics.

Increasingly, those farmers are sharing more and more information through social media channels — blogs, Twitter, Facebook and others. That means no matter where you are in the world, responses to requests for crop conditions, weather outlook or pricing trends are no farther away than the closest screen.

Check out some of USW’s favorite crop resources online this spring as the winter wheat crop emerges and farmers start to plant the spring wheat crop. Fair warning: they “tweet” about much more than just wheat.

Kim Fritzemeir, in Stafford, KS, shares farm updates and recipes on her blog, Kim’s County Line. In her March 17 post (photo below), “Aggie Visits the Wheat State,” she details the growth stages of the wheat and gives a sneak peak at this year’s emerging hard red winter (HRW) crop.

Chris Cullan shares information on wheat in Hemingford, NE, through the Twitter handle @ChrisCullan1. He often shares information from other “Wheaties,” including University of Nebraska-Lincoln wheat breeder Stephen Baenziger (@Huskerwheat). For example, look for their exchange on drought exacerbating freeze damage in some HRW wheat plots on March 9.

Jessica Wilcox also shared a tweet about potential freeze damage in Oklahoma on March 18, saying, “Some blue tint showing up on early conventional till #wheat.” Wilcox tweets from Oklahoma using the handle @jessicawilcoxOK.

Farther north, Farmer Fred and Jane Lukens provide a North Dakota perspective on the U.S. wheat crop and farming operations at @GriggsDakota and on the Griggs Dakota blog. On Feb. 26, they shared how winter weather affects the winter wheat crop: “Ground freezes hardest and deepest in the open where it is unprotected by snow. Snow cover provides a blanket of warmth on the ground. How can that be? After all, snow is pretty cold stuff. Snow is insulation on the land and holds heat in the ground.”

Down south, Wildorado, TX, farmer David Cleavinger has not had the benefit of snow cover. Through his handle @TXWheatFarmer, he shared on March 18, “Not a good day in the neighborhood. #drought2014 hard to handle. #wheat crop not looking good. 50 MPH wind.”

Farther east, Jason Scott, USW Secretary-Treasurer elect, provides perspective from his farm on the Eastern Shore of Maryland at @jescott81. Back in January, Scott tweeted from the USW Board Team travels to Nigeria, Ghana, Italy and Spain and checked in back home to see how his soft red winter (SRW) wheat crop and seed deliveries were going.

In addition to individual farmers, state wheat organizations are also a great source of information. On Twitter, find the following:
For information on test plots and new varieties from wheat breeders, check out these folks on Twitter:
This is by no means an exhaustive list, so look for more updates on more must-watch wheat-related social media sites (including the @AllAboardTour when it kicks off later this season) in future issues.

6. Wheat Industry News
  • U.S. Agriculture Celebrates National Ag Day. National Ag Day is March 25, 2014 and U.S. agricultural organizations will celebrate in Washington, DC, with screenings of two new documentaries — The Great American Wheat Harvest and Farmland — in addition to other events there and across the country. For more information, visit
  • TTIP Round Completed. The United States and European Union completed their fourth round of talks towards the Transatlantic Trade and Investment Partnership (TTIP) free trade agreement. Negotiators reported good progress but much work left to achieve the goal of an ambitious and comprehensive agreement. President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso will likely discuss TTIP at their summit meeting later this month.
  • WMC Flat Bread and Flour Tortilla Technology Short Course. The Wheat Marketing Center (WMC) in Portland, OR, will hold its Flat Bread and Flour Tortilla Technology Short Course April 8 to 11, 2014. For more information or to register, visit
  • IGP Grain Purchasing Short Courses. The International Grains Program (IGP) in Manhattan, KS, will lead a Grain Purchasing short course March 31 to April 11, 2014. For more information or to register, visit
  • IGP/NCI Durum Wheat Milling, Pasta Production Courses. IGP and The Northern Crops Institute (NCI) in Fargo, ND will hold a Durum Wheat Milling short course at NCI April 7 to 9, 2014. An NCI Pasta Production and Technology Short Course will follow from April 9 to 11. For more information or to register, visit

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