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U.S. Wheat Associates Activities Focus on Valuable Japanese Market

By Erica Oakley, USW Director of Programs

It has been a busy couple of weeks for the U.S. wheat industry in Japan. On Nov. 14, 2019, the Governor of Oregon, Kate Brown, held a “Friends of Oregon” reception where our friend and recently retired colleague, Mr. Wataru “Charlie” Utsunomiya was recognized for his long-term contribution to wheat trade between Oregon and Japan. Charlie’s relationship with Oregon began 40 years ago and included living in the state for more than a decade. The Governor thanked Charlie for “his extraordinary service to wheat growers and to Oregonians” and acknowledged the ties “between the U.S. and Japan around wheat that he [Charlie] has built and maintained.” With more than 100 in attendance at the reception, the strong relationship between Japan and Oregon and Charlie’s contribution to that relationship was palpable and heartwarming.

 

Wataru “Charlie” Utsunomiya accepts the “Friends of Oregon” award from Governor Kate Brown.

Charlie with Governor Kate Brown, friends and staff from USW, the Governor’s office, Oregon Department of Agriculture and the Japanese milling industry.

The reception was fortuitously timed as days later the USW Tokyo Office, now led by Mr. Kazunori “Rick” Nakano, held their annual Crop Quality (CQ) seminar on Nov. 18 and the Japan Buyers Conference on Nov. 19. This year’s CQ seminar had more than 140 in attendance – a record for the annual seminar held in Tokyo.

As the Japan Buyers Conference took place on Tuesday, the Lower House of Japan’s legislative body was passing the U.S.-Japan Trade Agreement, which moves U.S. wheat growers one step closer to the same preferential advantage as Canada and Australia. The flour millers that attended the conference in Tokyo represented more than 80% of the 2.78 million metric tons (MMT) of total 2018/19 commercial wheat sales to Japan reported by USDA as of May 31, 2019. There were 22 U.S. representatives, including 11 farmers and state wheat commission representatives from five states.

The conference focus differed slightly between the morning and afternoon sessions, with the morning audience largely comprised of milling personnel. Mike Spier, USW Vice President of Overseas Operations, kicked off the morning with welcome remarks. Drs. Michael Pumphrey of Washington State University and Senay Simsek of North Dakota State University both emphasized the focus on quality. Pumphrey discussed quality-first breeding techniques in the Pacific Northwest (PNW) and Simsek focused on the growing trend for clean labels and how can traits in most desirable varieties can provide the quality characteristics needed to forego additives. Bon Lee of the Wheat Marketing Center (WMC) rounded out the morning by highlighting WMC’s programmatic efforts and services for Asian customers.

Bill Flory, Idaho wheat farmer and commissioner, and Bon Lee, Wheat Marketing Center, at the 2019 USW Japan Buyers Conference. Photo courtesy of Idaho Wheat Commission.

The afternoon session shifted to a broader audience with Zeke Spears, Agricultural Attaché USDA Foreign Agricultural Service, providing opening remarks. Doug Goyings, USW Chairman and a wheat farmer from Paulding, Ohio, thanked the attendees for their long-standing relationship and shared the history and pictures of his family operation. Dr. Bill Wilson, North Dakota State University, discussed dynamic changes in the wheat marketing system, including changing consumer demands, logistics and technology, as well as increased risk and overall industrial changes. Greg Guthrie, BNSF Railway, provided an overview of BNSF’s efforts to meet demand and how technological advancement will benefit the Japanese wheat supply chain. Steve Wirsching, USW Vice President and West Coast Office Director, brought the conference full circle highlighting the superior value of U.S. wheat and efforts to ensure our Japanese customers receive the quality wheat they deserve.

2019 USW Japan Buyers Conference. Photo courtesy of Idaho Wheat Commission.

The day ended with a reception at the Palace Hotel with remarks from Goyings; Mr. Makoto Osawa, Ministry of Agriculture, Forestry and Fisheries, Vice-Minister for International Affairs; Mr. Gary Meyer, U.S. Embassy Minister-Counselor for Agricultural Affairs; and Mr. Yoshihisa Fujita, Japan Flour Millers Association. The reception rounded out a very welcome and successful conference.

Header Photo Caption: Doug Goyings, USW Chairman, welcomes the Japan Buyers Conference attendees.

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Learning Along with Customers on a Ten-Day Crop Quality Tour

By Michael Anderson, USW Assistant Director, West Coast Office

From Nov. 1 to 10, 2019, a team of eight U.S. Wheat Associates (USW) representatives crisscrossed the South Pacific covering almost 20,000 miles in ten days to report on the quality of the 2019 U.S. wheat crop. Touching down in three countries, the team met with more than 300 wheat buyers, flour millers and wheat food executives representing a major portion of wheat importers in their markets.

I had the good fortune to participate in my first series of Crop Quality Seminars with USW colleagues, wheat farmers and U.S. wheat industry experts in Indonesia, Thailand and the Philippines. Working as Assistant Director in USW’s West Coast Office in Portland, Ore., I get to meet with many overseas trade delegations in the United States and it was interesting to see so many familiar faces in their own countries. My colleagues agreed that it was also valuable to see and taste some of the beautiful pastries, breads, noodles and more end products these customers produce with flour milled from U.S. wheat.

To have this first experience in Southeast Asia was exciting because the region is of tremendous importance to our farmers, accounting for 30 percent of global wheat trade. The Philippines and Thailand are among the top 10 customers for U.S. wheat, with the Philippines ranking second among U.S. wheat importers year-to-date. The entire South Asia region makes up the second largest destination for wheat imports from the United States, totaling 3.28 million metric tons (MMT) so far in marketing year 2019/20.

Reporting on crop quality is USW’s largest trade service activity each year. It starts as soon as harvest starts in the United States. USW partner organizations collect and analyze hundreds of samples from country elevators and USW compiles the data in an annual Crop Quality Report. Seminars like the ones in which I participated are held in dozens of countries where growers, traders, consultants and customers have the unique opportunity to learn about and discuss the functional qualities that year of all six U.S. wheat classes.

Michael Anderson during one of his USW Crop Quality seminar presentations.

For example, participants heard from and were able to ask questions directly of experts like Art Bettge who has participated in several USW seminars since 2014. He is a respected cereal chemistry expert who worked at the USDA Agricultural Research Service Western Wheat Quality Lab in Pullman, Wash., for many years. At the South Asian seminars, Bettge reviewed the value of solvent retention capacity (SRC) analysis to determine end use and baking quality and interpreted SRC data about the 2019 U.S. crop and how growing conditions affected soft white (SW) quality factors.

It was a privilege to be part of the entire team who also covered global and U.S. wheat supply and demand during the seminars. My presentation was focused on helping customers make the most profitable use possible from the weekly USW Price Report, Harvest Reports in season, the weekly Commercial Sales Reports as well as the complete Crop Quality Report and individual quality reports by class that USW and its partners publish.

I also learned quite a bit from my participation. Our industry’s commitment to transparency is demonstrated in the data and seminars on U.S. wheat quality, an activity that has been shared with customers for more than 40 years. I also saw how the opportunity to interact directly with members of the wheat trade, technical specialists, USW staff and growers adds unique value to and separates U.S. wheat from competing supplies.

Now I am looking forward to the next opportunity to share this information with our customers around the world!

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USW Market Analyst Attends Crop Quality Seminars and Annual IAOM Conference

By Claire Hutchins, USW Market Analyst

Every year, U.S. Wheat Associates (USW) hosts educational seminars around the world to engage with overseas customers and share information on the unique quality and marketing characteristics of that’s year’s U.S. wheat harvest. In early November, I had the opportunity to join my USW colleagues for the first time in Dubai, U.A.E. and Cairo, Egypt for two crop quality seminars and the 30th anniversary celebration of the International Association of Operative Millers (IAOM). These events were substantially different, but equally important opportunities to engage with U.S. wheat customers around the world.

Crop quality seminars give customers an in-depth look at the quality of each class of U.S. wheat following that year’s harvest and an overview of broad supply and demand conditions affecting global wheat markets. Led by USW milling, baking and marketing specialists, as well as outside consultants, these seminars feature presentations not only detailing the growing conditions for each U.S. wheat class, but each class’s grading characteristics, flour testing results and baking data. Topics also range from competitor production highlights to foreign policy issues affecting international trade.

At the seminars that I attended, USW’s Ian Flagg, Regional Vice President, European, Middle Eastern and North African Regions’ Chad Weigand, Assistant Regional Director, Sub-Sahara African Region; and Tarik Gahi, Milling and Baking Technologist, Middle Eastern, East and Northern African Region; lead the crop quality, global supply and demand and marketing presentations. I had the opportunity to present “Understanding the USW Price Report and Basis,” an intuitive, how-to-read exploration of the USW Price Report we publish each week. Navigating U.S. export markets and making purchasing decisions is a complicated, risk-involved process and USW wants its customers to have as much information as possible for all wheat buying decisions.

USW Market Analyst, Claire Hutchins, presents on USW’s weekly Price Report at a 2019 crop quality seminar in Cairo, Egypt.

USW believes in complete supply chain transparency and hosts these crop quality seminars to educate buyers on the quality, end use versatility, and value of U.S. wheat. The USW Price Report adds to the philosophy of supply chain transparency because it gives the world’s buyers an independently derived baseline of export prices for U.S. wheat by class, protein level, export region and delivery month.

From these crop quality seminars, I learned how to better explain the distinct challenges and opportunities for buyers contracting for wheat value following this year’s harvest. USW tries to make the vast array of quality and pricing information accessible and intuitive to buyers and I am proud to be involved in these efforts.

The IAOM conference for the Middle East and Africa region in Dubai gave me the unique opportunity to interact with a global array of millers, bakers, technology specialists and grain traders. USW was instrumental in helping found IAOM in the Middle East in 1989 when the organization, a handful of millers and several industry specialists came together to create a professional and educational space to interact every year. Today, IAOM boasts over 1,000 members from all over the world and from all corners of the grain trading, storing, shipping, milling, processing and baking industries.

The conference gives members the opportunity to network, build relationships and learn about new topics critical to the wheat milling industry. USW is also an educational sponsor, providing funding and staff speakers at most IAOM conferences. This year, Ian Flagg presented on U.S. supply and marketing conditions while Tarik Gahi moderated a panel of topics varying from grain storage to technologies for flour and whole flour production to general innovations in flour milling. USW also sponsored a booth at the event which allowed customers and colleagues to ask USW staff about technical trends in milling and lab studies, global marketing conditions, how to communicate with U.S. grain traders and U.S. wheat supply and quality characteristics.

USW’s Europe and MENA Regional Vice President, Ian Flagg, presents on U.S. supply and demand conditions affecting global markets at the 30th annual IAOM Middle East and Africa conference in Dubai, U.A.E.

The IAOM conference, like the crop quality seminars, gave me an excellent look into USW’s role as a trade servicing organization for overseas customers. USW believes in supply chain transparency and creates every opportunity it can to educate buyers about the quality, versatility and value of U.S. wheat.

Staff from USW’s Rotterdam, Cape Town, and Casablanca offices ready to engage with customers and industry specialists at the 2019 IAOM Middle East and Africa conference in Dubai, U.A.E.

View the latest USW Price Report here and subscribe here to receive the USW Price Report via email every Friday.

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USW Publishes Annual Crop Quality Report and Hosts Seminars to Help Customers Make Purchasing and Milling Decisions

As a key part of its commitment to transparency and trade service, U.S. Wheat Associates (USW) produces an annual Crop Quality Report that includes grade, flour and baking data for all six U.S. wheat classes. The report compiles comprehensive data from analysis of hundreds of samples conducted during and after harvest by our partner organizations and laboratories. The report provides essential, objective information to help buyers get the wheat they need at the best value possible.

The 2019 USW Crop Quality Report is now available for download in English, Spanish, French and Italian, and will be available in Chinese and Arabic soon. USW also shares more detailed, regional reports for all six U.S. wheat classes on its website, as well as additional information on its sample and collection methods, solvent retention capacity (SRC) recommendations, standard deviation tables and more. Download these reports and resources from the website here.

USW’s annual Crop Quality Seminars are already underway and will continue over the next month around the world. USW invites its overseas customers, including buyers, millers and processors, to these seminars led by USW staff, U.S. wheat farmers, state wheat commission staff and educational partner organizations. The seminars dive into grade factors, protein levels, flour extraction rates, dough stability, baking loaf volume, noodle color and texture and more for all six U.S. wheat classes and are tailored to focus on the needs and trends in each regional market.

In 2019, USW is projected to host 43 seminars in 41 countries, including official seminars in the South America region for the first time in several years.

Customers have previously shared that they use the report throughout the year as a reference manual and to guide them through purchases and future planning. The seminars allow U.S. and USW experts to interpret the data and how to use it. Customers will often use the seminars and report as educational training for new employees.

The reports and seminars have been a traditional part of USW’s strategy since 1959, growing to become its single largest marketing activity.

Look for updates from the 2019 USW Crop Quality Seminars on Facebook and Twitter.

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Bad Weather Interrupts New Crop Northern Durum Harvest and Affects Quality

Durum production in the U.S. Northern Plains is down from 2018 with a reduction in overall quality due to historic late season rain and snow that also interrupted harvest. Due to the unusual conditions, the entire crop is not represented in this year’s data. Buyers should be extra vigilant and evaluate the importance of each factor for their end-use needs. Premium contract specifications will command higher prices, but good value can be obtained with diligent contract specifications. Ample carryover supplies from the excellent quality 2018 crop will be helpful in meeting traditional quality needs of buyers, but some parameters may still prove challenging.

That is a summary of northern durum crop quality from the upcoming U.S. Wheat Associates (USW) 2019 Crop Quality Report. Desert Durum® data is reported separately. The National Agricultural Statistics Service collected 166 samples from North Dakota and Montana and the Durum Quality Lab at North Dakota State University analyzed the samples. Funding for the annual survey come from USW member state wheat commissions and the USDA Foreign Agricultural Service. Complete 2019 crop quality data for all six U.S. wheat classes will soon be available online and at annual USW Crop Quality Seminars.

Weather and Harvest: Planting began in early May and ended the first week of June; crop emergence was slow. Mid-season rain boosted development and yield potential. Harvest began late, in mid-August, but with historic rainfall levels, less than 50% of the crop had been harvested by mid-September. The adverse weather continued into October, including periods of heavy snow, compromising quality on a large portion of the crop.

Regional production is estimated at 52 mil bu (1.4 MMT), down 20% from 2018. Final production will likely be lower than current estimates, as roughly 20% of the crop remained unharvested as of mid-October. With only 77% of expected samples collected and analyzed, and a higher than normal percentage of the crop moving directly into feed channels, this report does not represent the entire crop.

Wheat and Grade Data: The surveyed crop averages a U.S. No. 2 Amber Durum (AD) and 37% grades a U.S. No. 1 or 2 Hard Amber Durum (HAD), down from 86% a year ago. Average test weight of 61.1 lbs/bu (79.6 kg/hl) is similar to 2018 and above the 5-year average. Total kernel defects average of 3% is higher than 2018 and the 5-year average, likely due to elevated disease pressures and damage from the prolonged harvest.

The average vitreous kernel (HVAC) content is 64%, down sharply from 90% in 2018 due to harvest rains and localized lower protein levels. The average protein of 13.9% (12% mb), is equal to the 5-year average, but down from 2018. Distribution data shows that nearly 25% of the crop is above 90% HVAC and 38% is above 75% HVAC.

Excellent conditions during kernel development are reflected in the crop average thousand kernel weight (TKW) of 44 g and the percent of large kernels notably higher than last year and 5-year averages. The average falling number value is 345 sec compared to 425 in 2018 with 75% of the crop above 300 sec. Disease pressures were higher in 2019, with some areas impacted by Fusarium. The crop average DON is 0.6 ppm, up from 0.2 last year, but slightly below the 5-year average.

Semolina and Processing Data: Milling for the 2019 survey was performed on a Quadromat® Junior mill, limiting direct comparisons to the Buhler laboratory mill used previously. Semolina extraction is 57.5%, down sharply from 2018, likely attributed to the notable decline in vitreous kernels and shift in milling equipment. The milled product is showing a marked decline in ash levels, 0.6%, with just a slight increase in speck counts compared to 2018. Gluten index values are higher, at 67%, compared to 57% in 2018.

Semolina and cooked spaghetti evaluations show lower values compared to last year and the 5-year average. Semolina color values are lower for both color and brightness, and cooked pasta scores are also lower. Mixing properties reveal a stronger crop with an average mixogram of 6.4 compared to 5.3 in 2018. Cooked pasta evaluations show higher cooked weight compared to the 5-year average, but also higher cooking loss and less cooked firmness.

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Crop Quality Concerns, Minimal Farmer Selling Drive U.S. Spring Wheat Export Prices

By Claire Hutchins, USW Market Analyst

Despite the potential for reduced U.S. hard red spring (HRS) production year-over-year and crop quality concerns on late-harvested HRS, the United States is still well-stocked to meet overseas customer needs throughout marketing year (MY) 2019/20. As domestic sellers and buyers manage their risk in a dynamic market, however, overseas buyers should expect HRS export basis to increase. U.S. Wheat Associates (USW) wants to provide a closer analysis of this rather unique situation.

Unrelenting precipitation in the Northern Plains continued to challenge HRS wheat producers throughout the 2019 harvest season. Excess moisture on unharvested wheat can lead to low falling numbers, reduced test weights, reduced percentage of DHV and increased DON levels. By Sept. 20, only 76 percent of the country’s spring wheat was harvested compared to 96 percent in 2018.

As markets considered potential quality issues on the rest of the harvest, HRS export prices jumped significantly between Sept. 13 and Sept. 20. The average Gulf HRS 14.0 (12% moisture basis) export basis for nearby delivery increased 20 cents/bu from $1.40/bu to $1.60/bu. In the same week, average Pacific Northwest (PNW) HRS 14.0 export basis for nearby delivery jumped 36 percent from $1.05/bu to $1.65/bu. Market uncertainty carried into the week of Sept. 27 when the country’s HRS harvest was only 87 percent complete, well behind the 5-year average of 99 percent. By Sept. 27, the average Gulf HRS 14.0 export basis increased another 30 cents to $1.90/bu and the average PNW HRS 14.0 export basis added 27 percent to $2.10/bu, both driven by crop quality concerns and minimal farmer selling.

Source: U.S. Wheat Associates Price Report, Oct. 4, 2019

In its October World Agricultural Supply and Demand Estimates (WASDE) report, USDA estimated the United States would produce 15.2 million metric tons (MMT) of HRS in 2019. On Oct. 15, USDA reported harvest was 94 percent complete, still well behind the average completion date of around Sept. 30. Many industry sources now believe the HRS harvest is essentially over as farmers struggle to enter their fields due to ongoing precipitation, including heavy snow in parts of North Dakota and Montana. If realized, this would put the total 2019 U.S. HRS harvest closer to 14.3 MMT, 12 percent lower than last year.

As noted, the United States is still well-stocked to meet export throughout MY 2019/20. Industry experts estimate between 60 and 65 percent of this year’s HRS harvest, about 8.94 MMT, is high-quality, milling grade wheat. USDA estimated 2019 HRS beginning stocks at 7.16 MMT. This puts the total supply of U.S. milling wheat in MY 2019/20, including the remainder of last year’s excellent harvest, at 16.1 MMT.

However, customers should be aware that a large portion of these stocks remain in storage as farmers are reluctant to sell wheat at current local prices. HRS export basis levels continue to climb because producers have several incentives to hold their high-quality HRS into the coming months.

First, Minneapolis Grain Exchange (MGEX) forward futures contracts show a significant carry between December 2019 and December 2020. As of the last trade on Oct. 15, the December 2019 MGEX HRS futures contract (MWEZ19) traded at $5.45/bu while the December 2020 MGEX HRS futures contract (MWEZ20) closed at $5.95/bu. Each MGEX HRS futures contract gains about 10 cents per contract period starting in December 2020, a reason for farmers to hold supplies until cash prices increase.

Source: MGEX

Second, average local basis levels are firming across the Northern Plains, which signals to farmers that the discount between futures values and the cash price they receive could shrink over time. For example, according to DTN data, the average HRS local basis value in North Dakota decreased from negative $0.79/bu to negative $0.72/bu between Sept. 30 and Oct. 15. At one elevator in North Dakota, the gap between the December futures price and the local cash price shrank 42 percent from negative $1.05/bu to $0.65/bu. Over the same period, the local average HRS cash price in North Dakota increased from $4.66/bu to $4.74/bu.

Finally, storage space is not under pressure. Typically, HRS moves into the market around harvest and when storage space is needed for row crop harvest, which in 2019 has seriously affected in the Northern Plains. For example, the heavy snow hit North Dakota with only 1 percent of the corn harvest and 16 percent of the soybean harvest completed. With no other crops coming out, farms and country elevators do not yet need to move much HRS wheat out of storage.

Given this situation, USW believes HRS export basis will continue to rise until local cash prices increase enough to encourage producers to liquidate their HRS stocks into the milling and export channels. The United States has plenty of high-quality HRS available to sell into MY 2019/20, but it will take a significant shift in local cash price dynamics across the Northern Plains for these supplies to reach export terminals.

 

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The 2019 Soft White Crop Shines Again

Pacific Northwest (PNW) farmers produced another fine soft white wheat (SW) and white club (WC) crop with good test weight and very acceptable finished product characteristics for 2019. Adequate soil moisture at planting and throughout the growing season did contribute to higher moisture and protein content compared to 2018 but protein remained lower than the 5-year average. In fact, the higher SW protein segment provides opportunities in blends for crackers, Asian noodles, steamed breads, flat breads, and pan breads. Variations in performance data for 2019 compared to 2018 and the 5-year averages are included below for this 6.09 million metric ton (MMT) crop, including 170,000 MT of WC.

That is a summary of results from the U.S. Wheat Associates (USW) 2019 SW and WC crop quality analysis to be posted soon at https://www.uswheat.org/market-and-crop-information/crop-quality/. To complete the analysis, the Wheat Marketing Center (WMC) received and tested SW and WC samples from Idaho, Oregon, and Washington. The Federal Grain Inspection Service (FGIS) graded and ran wheat protein on each sample. WMC conducted wheat, flour, Solvent Retention Capacity (SRC), dough, and finished product tests on composites based on production zones and protein levels. Funding for the annual survey come from state wheat commission USW members and the USDA Foreign Agricultural Service.

As always, buyers are encouraged to review their quality specifications to ensure that their purchases meet their expectations.

Wheat and Grade Data: The Overall average grade of the 2019 SW and WC crops is U.S. No. 1. The average SW test weight of 61.6 lb/bu (81.0 kg/hl) is slightly lower than last year’s 61.7 lb/bu (81.1 kg/hl); WC test weight of 60.6 lb/bu (79.7 kg/hl) is slightly higher than 2018’s 60.4 lb/bu (79.5 kg/hl). SW has fewer damaged kernels, fewer shrunken and broken kernels, and less foreign material than the 5-year averages. WC shrunken and broken kernel percentages are lower than last year and the 5-year averages. WC foreign material is higher than last year and 5-year averages. WC dockage is slightly higher than last year and the 5-year averages. Other WC grade factors are similar to past averages. Wheat moisture for both SW and WC is above last year and the 5-year averages.

The Overall SW and WC wheat protein content (12% mb) of 10.0 and 9.8%, respectively, are 0.7 and 0.8 percentage points above the respective 2018 values, but below those of 5-year averages. SW and WC wheat ash contents (14% moisture basis) are similar to last year and the 5-year averages. Thousand kernel weight for SW is above 2018 and the 5-year average levels; WC is lower than last year and higher than the 5-year average. SW kernel diameter is the same as last year, but larger than the 5-year average. WC kernel diameter is smaller than last year, but larger than the 5-year average. Falling number values are 317 sec for SW and 355 sec for WC.

Flour, Dough, and Bake Data: The 2019 Buhler Laboratory Mill flour extraction average for SW and WC at 72.1% and 72.8% respectively are lower than last year and the 5-year averages. Flour protein content (14% mb) is 8.9% for both SW and WC. Flour ash content (14% mb) for both SW and WC are higher than last year but the same as 5-year averages. Amylograph peak viscosity value for SW is 485 BU, slightly lower than last year; WC is 523 BU, much higher than last year. Starch damage value is slightly higher for SW than last year but lower than the 5-year averages. WC starch damage is lower than last year and the 5-year averages.

Solvent retention capacity (SRC) water values for SW and WC are less than last year and 5-year averages. SW lactic acid and sodium carbonate values are similar to last year and the 5-year averages. WC lactic acid values are higher than last year, but same as 5-year average. SW and WC gluten performance index (GPI) values are similar to last year and 5-year averages. SW farinograph peak and stability times are shorter than last year and the 5-year averages. WC peak time is slightly longer than last year and 5-year averages. SW and WC water absorptions are similar to last year, but less than the 5-year averages. The SW and WC alveograph L values are considerably longer than last year and 5-year averages. SW and WC extensograph resistance is larger than last year and the 5-year averages. SW and WC extensibility values are longer than last year and the 5-year averages.

Sponge cake volume for SW at 1104 cc is larger than last year, but smaller than the 5-year average, and the total score is slightly lower than last year and the 5-year averages. The sponge cake volume for WC at 1141 cc is slightly larger than last year, but smaller than the 5-year average, and total score the same as last year and much higher than the 5-year averages. SW and WC cookie diameter values are smaller than last year, but similar to the 5-year averages. SW and WC cookie spread factors are more than last year and the 5-year averages.

Chinese Southern-Type Steamed Bread: In southern-type steamed bread compared to a control flour, the 2019 SW and WC specific volumes are slightly less than last year and the 5-year averages. The SW total score is higher than last year and the 5-year averages; WC is the same as last year, but lower than the 5-year average.

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Good Milling and End-Product Performance is Available in 2019 Hard Red Winter Wheat Supplies

Unexpectedly high yields from the U.S. Plains to the Pacific Northwest (PNW) resulted in lower wheat and flour protein in the 2019 hard red winter (HRW) wheat crop, but the crop exhibits good milling and end-product characteristics. Even though mixing times and tolerances are shorter than the five-year averages, the loaf volumes achieved indicate there is adequate protein quality to make quality bread. This crop meets or exceeds typical HRW contract specifications and should provide high value to the customer. The 2019 HRW crop can be characterized as clean and sound with very good milling properties, but with below average protein content still capable of producing good end products.

That is a summary of the major regional results for HRW from the upcoming U.S. Wheat Associates (USW) 2019 Crop Quality Report. California HRW data is reported separately. Plains Grains, Inc., in cooperation with the USDA/ARS Hard Winter Wheat Quality Lab, Manhattan, Kan., analyzed 494 HRW samples collected from grain elevators in Texas, Oklahoma, Kansas, Colorado, Nebraska, Wyoming, South Dakota, Montana, Washington, Oregon and Idaho. Funding for the annual survey come from USW member state wheat commissions and the USDA Foreign Agricultural Service.

Weather and Harvest: The 2019 HRW planted area represents near historic 100-year lows, continuing the trend of recent years. Despite stagnant planted area, HRW production is estimated at 22.9 MMT (840 mil bu), a 27% increase over 2018. USDA estimates the HRW supply (excluding imports) is the third highest in the last 20 years.

Various climatic conditions challenged this crop. However, moisture remained adequate, or even excessive, in the central and southern production areas and resulted in better than expected yields, lower than average protein, but otherwise good milling and processing characteristics. The U.S. Southern, Central and Northern Plains experienced an unusually wet spring, slowing crop maturity and uniformly delaying the beginning of harvest two weeks or more. At the same time, the PNW and Montana experienced abnormal swings in temperature and severe storms. Despite intense and prolonged moisture during later stages of crop development, disease and insect pressure in most production areas was unusually low.  Once harvest began, it progressed normally in most production areas.

Wheat and Grade Data: The 2019 crop has generally very good kernel characteristics. Overall 93% of Composite, 91% of Gulf-Tributary and 97% of PNW-Tributary samples graded U.S. No. 2 or better. Average test weight of 60.6 lb/bu (79.6 kg/hl) is below 2018 but above the 5-year average. Average dockage (0.5%), total defects (1.3%), foreign material (0.2%) and shrunken and broken (0.8%) are all equal to better than 2018 and the 5-year averages. Average thousand kernel weight of 32.7 g significantly exceeds last year and the 5-year average (both 30.7 g). Kernel characteristics, including test weight, thousand kernel weight and kernel diameter are very good and consistent with favorable growing conditions. However, growing conditions favoring kernel size and test weight are not conducive to accumulating protein, which is below last year and the five-year averages. The average wheat falling number is 378 sec, indicative of sound wheat.

Flour and Baking Data: The Buhler laboratory flour yield average is 74.0%, comparable to the 2018 average of 75.1% and the 5-year average of 75.5%. The 2019 flour ash of 0.48% (14% mb) is comparable to last year’s 0.44% but significantly lower than the 5-year average of 0.55% due to milling adjustments made in 2018. The alveograph W value of 223 10-4 J is significantly lower than last year but comparable to the 5-year average of 234 10-4 J. Farinograph peak and stability times, 3.3 min and 7.3 min, respectively, are significantly lower than last year’s 5.2 min and 12.2 min. Average bake absorption is 62.7%, below the 63.7% value for 2018 but comparable to the 5-year average. Overall loaf volume averaged 863 cc, well below last year’s 901 cc, but comparable to the 5-year average of 851 cc.

Complete 2019 crop quality data for all six U.S. wheat classes will soon be available online and at annual USW Crop Quality Seminars.

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Too Much Rain on a Smaller Soft Red Winter Crop

Following planting in the fall of 2018, much of the U.S. soft red winter (SRW) growing area received excessive moisture throughout the winter and spring, which also caused lengthy harvest delays in many areas. The excessive moisture adversely affected quality by reducing falling number values and increasing DON values in some areas. At an estimated 7.01 million metric tons (MMT), this is a smaller crop than in 2018 because farmers seeded less and average yield per harvested acre was below last year and the five-year average. Processors should find good qualities in the 2019 SRW crop for cookies and crackers and segments of the crop showed good cake qualities.

That is a summary of results from the U.S. Wheat Associates (USW) 2019 SRW Crop Quality Report, now posted online at https://bit.ly/SRWCQ0919. To complete the report, Great Plains Analytical Laboratory in Kansas City, Mo., collected and analyzed 261 samples from 18 reporting areas in the 11 states that account for about 72% of total 2019 SRW production. Funding for the annual survey come from state wheat commission USW members and the USDA Foreign Agricultural Service.

As always, buyers are encouraged to review their quality specifications to ensure that their purchases meet their expectations.

Wheat and Grade Data. The overall average grade of the samples collected for the 2019 SRW harvest survey is U.S. No. 2. The average test weight is 58.1 lb/bu (76.5 kg/hl), equal to the 5-year average and above the 57.9 lb/bu (76.2 kg/hl) average in 2018. The Gulf Port average of 58.5 lb/bu (76.9 kg/hl) is above both last year and the 5-year average. The East Coast test weight average of 56.9 lb/bu (75.0 kg/hl) is above last year but below the 5-year average of 57.4 lb/bu (75.6 kg/hl).

The East Coast Total Defects average of 2.5% is above last year and the 5-year average, indicating that damaged and shrunken and broken kernels are slightly higher than usual in that portion of the crop. The Gulf Port Total Defects is 1.1%, above 2018 but almost half of the 5-year average. Other Gulf Port grade factors, dockage and moisture are close to or higher than 2018 and 5-year average values.

The Composite average wheat protein content of 9.5% (12% moisture basis) is lower than 2018’s 9.9% and the 5-year average of 9.7%. Both the Gulf Port protein average of 9.4% and East Coast average of 9.7% are below the respective 2018 and 5-year averages. The Composite average falling number of 288 seconds is significantly lower than 2018 and the 5-year average. The Gulf Port average of 289 seconds and the East Coast average of 283 seconds are both significantly below 2018 and the 5-year averages. Approximately 21% of samples had a falling number below 250 seconds in 2019, with 13% below 225. The Composite DON average of 1.3 ppm is above the 2018 average and close to the 5-year average of 1.2 ppm. The East Coast value of 0.5 ppm is below the 5-year average while the Gulf Port value of 1.5 ppm is above the 5-year average. Of the samples tested for DON, 33% of the Gulf Port results and 84% of the East Coast results were less than 1.0 ppm.

Flour and Baking Data. The Composite, East Coast and Gulf Port Buhler laboratory mill flour extraction averages are below 2018 and the 5-year averages. The farinograph peak and absorption values are similar to 5-year averages, but the stability values are all below the 5-year averages. The SRC values generally indicate good quality for cookies. The Composite, East Coast and Gulf Port alveograph L averages of 81 are lower than last year and the 5-year average, indicating lower extensibility. All other alveograph averages are similar to the respective 5-year averages given the variability of alveograph analysis. The Gulf amylograph average of 392 BU and East average of 462 indicate relatively high levels of amylase activity in the crop and are consistent with the low falling numbers.

The Composite, East Coast and Gulf Port cookie spread ratios are all higher than last year and the 5-year averages, indicating good extensibility. Average loaf volumes are all lower than last year and the 5-year averages.

USW will share complete data for all classes of U.S. wheat in future Wheat Letter posts and with hundreds of overseas customers at several upcoming events, including USW’s annual Crop Quality Seminars, and in its annual Crop Quality Report.

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Fair Weather and Adequate Soil Moisture on HRS Tour Predict Good Yield Potential

By Claire Hutchins, USW Market Analyst

This week, my colleague, Michael Anderson, and I joined four U.S. wheat customers from Mexico and Chile for the annual Wheat Quality Council (WQC) Spring Wheat Tour, an early survey of the 2019/20 hard red spring (HRS) crop in North Dakota and surrounding states. Today the tour estimated a final average yield potential of 43.1 bushels per acre (bu/ac) or about 1.17 metric tons (MT) per hectare for the 2019/20 North Dakota HRS crop. That is 5% higher than last year’s average of 41.1 bu/ac (1.12 MT/hectare). This year, tour participants made 371 stops to scout fields compared to 325 in 2018.

Each year, industry participants from across the United States and several countries gather in Fargo, N.D., and spend two and a half days in small scout teams, randomly stopping at several fields in a full day. Teams follow individual routes established many years ago by WQC to ensure most of North Dakota and parts of northern South Dakota and western Minnesota are scouted by tour participants. Teams measure yield potential, determine an average for the route and estimate a cumulative, daily tour average when all scouts come together again in the evening.

Twitter Post: Day 2 on #wheattour19. Yellow route, Car #3. Near Hensler, ND. 35 estimated bu/acre. Healthy looking wheat in the soft to hard dough stage.

Dusty boots. Another purpose of the tour is to help educate a broad range of stakeholders about wheat production challenges. Scouts are asked to look for disease, weed and insect pressure, as well as soil conditions. This year, scouts enjoyed warm, dry tour conditions, a big change compared to a very wet period from August 2018 well into this year. Soil moisture is still adequate in some parts of the region, but the July 16 U.S. Drought Monitor shows abnormally to severely dry conditions in north central North Dakota.

On the first day, the tour traveled from Fargo along routes covering most southern North Dakota counties. The cumulative first day average HRS yield potential was 45.6 bu/ac (3.07 MT/hectare), compared to 38.9 bu/ac (2.61 MT/hectare) in 2018, on adequate soil moisture conditions, warm weather and minimal disease or insect pressure. Participants surveyed 153 fields recording a range from 13.5 bu/ac to 96.2 bu/ac. We saw strong stands of healthy wheat that were three to four weeks from harvest, depending on weather. Fields were mostly dry but standing water could be seen alongside roads and fields. Temperatures were in the mid- to high-70s Fahrenheit (24 to 26 degrees Celsius) and moderate Fusarium Head Blight (also known as “scab”) development was seen along several routes.

Twitter Post: “Yellow route, east of Mapes, ND. Jack Detiveaux with @AmericanBakers is riding along with USW’s Claire Hutchins today. Estimated yield 48 bu/acre on 7″ rows.”

On the second day, teams traveled north and east through north central North Dakota where wheat does not compete as much with corn or soybeans for acreage as it does in the southeastern region of the state. Participants noted significantly larger fields, more mature wheat and less head scab pressure. The cumulative Day 2 average HRS yield potential was 40.6 bu/ac (2.74 MT/hectare), compared to 41.3 bu/ac (2.78 MT/hectare) in 2018. Participants surveyed 139 fields recording a range from as low as 14.2 bu/ac to a high of 74.7 bu/ac.

On the third day, participants traveled south and east back to Fargo for the final scout meeting hosted by the Northern Crops Institute (NCI). Teams noticed wetter field conditions, slight lodging, light scab pressure and more delayed overall crop development. The cumulative average HRS yield potential for the day was 48.6 bu/ac (1.32 MT/hectare), compared to 46.3 bu/ac (1.26 MT/hectare) in 2018.

Soil moisture impact. During the tour teams met many farmers in their fields. North Dakota farmers commented that beneficial rainfall throughout the spring and summer gave the 2019 HRS crop a boost over last year. Nearly every route averaged higher estimated yields on this wheat tour than the same routes in 2018, supporting farmer claims that 2019 could surpass 2018 harvest levels. One farmer near Wishek, N.D., expects 60 bu/ac on his farm due to cool temperatures earlier this spring and adequate soil moisture levels, which minimizes disease pressure and helps wheat yield potential. If realized, his farm would yield 39% higher than the tour’s total estimated average of 43.1 bu/acre (1.17 MT/hectare).

Days to harvest. Scouts on the tour identified most fields in the soft to hard dough stages, indicating harvest is two to five weeks away depending on weather. If warm, breezy conditions persist, some North Dakota farmers could begin the HRS harvest in as few as 20 days.

For more information, visit the WQC website at https://wheatqualitycouncil.org. Highlights and photos from the tour are posted on Facebook and Twitter using #wheattour2019.

Twitter Post: Yellow route, car #3. Near Barlow, ND. Estimated yield 37.3 bu/acre. A few spots of Fusarium Head Slight, but otherwise a good looking field.

 

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