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News and information from around the wheat industry.

 

Speaking of Wheat

Farmers have a unique perspective of longevity and sustainability because our livelihoods depend on it. And it breeds a level of commitment to these practices over the generations. Wheat is an integral part of our system and has been for generations, but it’s important to see it in a context of the whole system that is anchored in this crop that just naturally fits.” – Park River, North Dakota, farmer Aaron Kjelland, in Episode 1 of the new “Stories of Stewardship” video series.

Thank You and Best Wishes to Ann Murchison!

Our colleague Ann Murchison (shown in the photo at the top of this page) has retired from her position as Office Manager, West Coast Office in Portland, Ore., after almost 29 years with U.S. Wheat Associates (USW). Over those years, Ann has welcomed hundreds if not thousands of overseas customers and other office visitors, shipped tons of wheat samples around the world, and cheerfully taken care of the people and busy office in the Albers Mill Building on the Willamette River. We all wish Ann a long and healthy retirement and sincerely thank her for such dedicated service!

Congratulations to Cathy Marais

USW is happy to recognize the service of Cape Town Regional Finance and Administration Manager Cathy Marais who marks 30 years of service on Jan. 17, 2024. Dankie, Cathy, for your hard work and dedication from all your colleagues!

Photo of Cathy Marais

Cathy Marais, USW Cape Town

K-State Seeks Nominations for New Grain Science Department Leader

The College of Agriculture at Kansas State University (KSU) is now accepting nominations and applications for the Head of the Department of Grain Science and Industry. This is a critical position for the milling industry. Click here for more information. Screening of applications will continue until the position is filled.

Wheat Breeding Innovation News

Researchers at the United Kingdom’s John Innes Centre have announced use of gene-editing techniques to help identify a temperature tolerance factor that may protect wheat from the increasingly unpredictable challenges of climate change. A team headed by Prof. Graham Moore made the discovery during experiments looking at wheat fertility in plants exposed to either high or low temperatures. Read more about this wheat breeding innovation here. In other news, U.S. based company Cibus, Inc., said it has successfully regenerated wheat plants from single cells in a wheat cultivar, a breakthrough the agricultural technology company said may be used to develop traits like disease resistance and nitrogen use efficiency that support increased yields. Read more about this innovation here.

Durum Prices are More Competitive

“World Grain” recently reported that pasta manufacturers looking for 2024 semolina coverage will find durum values lower than a year ago and down sharply from mid-December 2021. And yet U.S. Northern Plains durum growers deciding when to sell stored supplied will encounter bids hovering about a $1 a bushel higher than the five-year average for the date. Four months before the typical seeding time for the U.S. northern durum crop, soil moisture conditions were in much better shape than a year earlier. Read more here.

Durum

El Niño Winter Outlook

“Farm Progress” publications in the United States recently looked at the potential impact of the El Niño weather patterns on global wheat production. A wetter summer and fall in 2023 helped reduce the amount of wheat produced in areas experiencing drought conditions. The article notes that early in 2024, top hard red winter wheat-growing regions in the Southern Plains enjoyed higher rainfall volumes than at the same point over the past two years. Ratings improved for winter wheat crops in top producer Kansas, as well as Texas, Oklahoma, and South Dakota. But dry soil continues to plague the entire Heartland. Through early February, 32% of U.S. winter wheat acres were rated in drought condition (below). And perhaps more notably, 25% of spring wheat acres were located within a drought area at that time (see additional maps here). Read more here.

 

 

 

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U.S. Wheat Associates (USW) is happy to share a new video series featuring farmers explaining how they responsibly manage the land and natural resources entrusted to their care.

“Stories of Stewardship” premiered Jan. 10, 2024, on Facebook with Episode 1 focusing on the sustainable practices applied by five farm families growing different classes of wheat across the range of conditions in the United States. They share a commitment to farm in ways that sustain economic viability to produce safe, wholesome wheat for the world while ensuring the land is passed on in better condition for future generations.

Watch Now

Watch Episode 1 here and stay tuned as five new episodes are released Jan. 24, Feb. 7, Feb. 21, March 6, and March 20.

USW wants to thank Tom Cannon of Blackwell, Okla., Ben and Stephanie Bowsher of Waynesfield, Ohio, Nick Jorgensen of Ideal, S.D., Art Schultheis of Colton, Wash. (photo above), and Aaron Kjelland of Park River, N.D., for sharing their Stories of Stewardship.

To learn more about sustainable U.S. wheat production, visit the USW website at https://www.uswheat.org/stories-of-stewardship/. USW is also a member of the U.S. Sustainability Alliance where you can see a fact sheet on wheat sustainability.

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Flour millers and bakers in the Philippines have a strong preference for U.S. wheat, and U.S. Wheat Associates (USW) has spent many years building relationships in the important market.

‘Spotlight on the Philippines’ Provided Opportunity

Because of USW’s work there, USDA invited USW to participate in “Spotlight on the Philippines,” a webinar held in December that was organized by the Foreign Agricultural Service (FAS) office in Manila. USW Assistant Regional Director Joe Bippert presented during the event. He shared USW’s experiences in the market and some of its plans for the coming year.

In this short video – the first of two videos on USW’s work in the market – Bippert explains why USW was chosen to participate in the FAS event. He also provides some background on U.S. wheat’s successes in the Philippines.

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During the summer of 2023, U.S. wheat export basis levels hovered near record lows as slow demand met seasonal weakness. Across almost all the U.S. wheat classes and export points, export basis levels hovered below average, signaling a unique pricing opportunity for U.S. wheat. Historical trends indicate that basis levels generally hit their lowest point during wheat harvest and increase in October, November, and December as export capacity tightens in response to an influx of corn and soybeans.

Following the seasonal pattern, U.S. export basis levels have since risen for all U.S. wheat classes. Despite the increase, the average HRS basis for the Gulf and Pacific Northwest sits 15% below the five-year average, while HRW and SRW sit 31% and 27% below the five-year average, respectively. The following examines the underlying factors driving this trend and its impact as we dive into the second half of marketing year 2023/24.

Line chart showing export basis levels from December 2022 to December 2023.

U.S. export basis levels generally follow a seasonal pattern, hitting lows during the wheat harvest and highs during October, November, and December as elevation capacity tightens in response to the corn and soybean harvest. In July 2023, basis levels hovered near record lows as seasonal weakness was coupled with an overall lack of demand. Source: U.S. Wheat Associates Price Report.

Excess Capacity Meets Slow Demand

The most significant factor influencing the below-average basis values is the overall decrease in export volume for grains and oilseeds, particularly for soybeans. According to USDA, for the week ending December 28, 2023, inspections for all grains (wheat, corn, and soybeans) were down 19% from the same period last year and 39% below the three-year average.

U.S. soybean exports are down due primarily to South American competition in the Chinese market. Reflected in the December 2023 World Agricultural Supply and Demand Estimates, forecast for U.S. soybean exports to all destinations came in at 47.6 MMT, down from 54.2 MMT in 2022/23 and 58.6 MMT in 2021/22. Meanwhile, total Brazilian exports are forecast at a record 99.5 MMT, up from 95.5 MMT the year prior and 18% above the five-year average as record quantities of soybeans are exported to China.

U.S. wheat exports face similar competitive headwinds. USDA export data shows that the export pace sits 14% behind last year and 26% below the five-year average.

Line chart shows price changes since 2019 for secondary grain railcar auction market bids to illustrate effect on wheat export basis.

Secondary Railcar Auction Market Bids (a real-time reflection of the supply and demand for rail freight) for October, November, and December sit at $65.12/car on average, down from $836.11/car last year and the five-year average of $262.96/car. The combined impact of excess capacity within the grain handling and logistics system has removed pressure on wheat basis levels and allowed them to drift lower. Source: USDA Rail Transportation Dashboard.

The decrease in overall grain volume has created surplus capacity in the U.S. logistics systems, particularly for the railroads. As a result, Secondary Railcar Auction Market Bids (a real-time reflection of the supply and demand for rail freight) for October, November, and December sit at $65.12/car on average, down from $836.11/car last year, and the five-year average of $262.96/car. The combined impact of excess capacity within the grain handling and logistics system has removed pressure on wheat basis levels and allowed them to drift lower.

Basis Levels Support Competitiveness

As overall grain export volume remains below average, we can expect the depressing impact on the basis to continue. South American competition for soybean exports will continue to influence grain markets, forcing participants to readjust to the changing dynamic.

The combined impact of below-average basis levels and the downward trend in wheat futures prices, driven by competition from the Black Sea, Canada, and other origins, has helped improve U.S. wheat competitiveness throughout 2023/24. Therefore, basis movements will continue to play a key role in maximizing value and capitalizing on opportunities as they arise in the market.

By USW Market Analyst Tyllor Ledford.

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On behalf of the dedicated U.S. Wheat Associates (USW) colleagues around the world and the wheat farmers we represent, we wish you all a joyous, healthy holiday season and a peaceful and prosperous 2024!

U.S. Office Schedule

In recognition of Christmas and New Year’s holidays, the USW Headquarters and West Coast Offices will be closed: Friday, Dec. 22; Monday, Dec. 25; Friday, Dec. 29; and Jan. 1, 2024. The USW Wheat Letter email update will resume its bi-weekly schedule on Jan. 11, 2024. The next USW Price Report will be published Thursday, Dec. 22 and resume its weekly schedule on Jan. 5, 2024.

 

2023-24 USW Holiday Schedule

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News and Information from Around the Wheat Industry

Speaking of Wheat

Regenified, what does that mean? Raw materials … grown in a very sustainable effort. It’s saying that we are making things better tomorrow than they were yesterday, from a farming perspective. So, we are building the soil, we are preserving the soil, we are protecting the environment, we are doing all those things that are very important for generations to come.” – Bernard Peterson, Chairman, National Wheat Foundation and Kentucky wheat farmer who is the sole supplier of red winter wheat for Makers Mark® Bourbon. Read more here.

KSU Awarded $16M Grant to Study Crop Yields and Sustainability

The Foundation for Food & Agriculture Research (FFAR) awarded a $7,657,633 grant to Kansas State University (KSU) to support an expansive study across the U.S. Corn Belt and Great Plains exploring how crop, soil, and water management affect the soil microbial communities that drive agroecosystem functions. Partners including KSU, Bayer, Iowa State University, LandScan, LI-COR Environmental, Mississippi State University, The Ohio State University and The University of Kansas also provided funds for a total investment of $16,362,948.

Argentine Wheat Policies, Production in Spotlight

With Javier Milei’s election as Argentina’s president, farmers there are hoping new policies will help rapidly expand wheat production, Bloomberg wrote this week. The news service cites a farmer and board member of the Bahia Bianca Grain Exchange who believes that Milei’s promise to undo currency controls cut agricultural export tariffs will entice increased production. The last time Argentina deregulated its wheat market eight years ago production soared by 52% and kept climbing to fresh records. Read more.

Christopherson Tells U.S. Wheat Quality Story

Regional farm publication Tri-State Neighbor has published an interview with South Dakota Wheat Commission Executive Director Reid Christopherson about his participation in U.S. Wheat Associates (USW) Crop Quality Seminars in North Asia. He said the seminars put U.S. industry experts “in front of several of the best international customers, telling that story of why U.S. wheat should be a part of their formulation” adding that there is a special story to tell about the functional quality of U.S. wheat. Read more here.

Reid Christopherson, executive director of South Dakota Wheat Growers Association, recently traveled with a group of six others to China, Japan, South Korea and Taiwan to tell the story of U.S. Wheat.

Reid Christopherson, Executive Director of South Dakota Wheat Growers Association, recently traveled with a group of six others to China, Japan, South Korea and Taiwan to tell the story of U.S. Wheat.

K-State Research: Lower Gluten with Same Dough Quality      

Kansas State University researchers have reported a breakthrough in developing wheat-based foods that contain lower amounts of gluten, a discovery that may lessen the adverse effects for those with celiac or other autoimmune diseases. Scientists from K-State’s Wheat Genetics Resource Center and the USDA’s Agricultural Research Service — in partnership with USW member Kansas Wheat — successfully used a gene editing technique to reduce the presence of two types of gluten-coding genes called gliadins. “We were very surprised that [editing] reduced the immunotoxicity caused by gliadin genes in wheat by 47-fold,” said Dr. Eduard Akhunov, University Distinguished Professor in K-State’s Department of Plant Pathology, and director of the Wheat Genetics Resource Center. Read more.

 

 

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U.S. Wheat Associates (USW) staff across the world have had quite a busy year in 2023. Blessed in 2019 with additional funding from the Agricultural Trade Promotion (ATP) program but handicapped by pandemic restrictions, our teams have been playing “catch-up” with positive results.

The extra push helped USW conduct a record number of activities from trade teams and short courses to buyers’ conferences and board teams in 2023.

USW led a trade team of Nigerian and Kenyan wheat buyers on visits to farms and facilities in Kansas, North Dakota and Minnesota. The team was interested in learning about U.S. hard red winter (HRW), hard red spring (HRS) and hard white (HW) wheat.

USW led a trade team of Nigerian and Kenyan wheat buyers on visits to farms and facilities in Kansas, North Dakota and Minnesota. The team was interested in learning about U.S. hard red winter (HRW), hard red spring (HRS) and hard white (HW) wheat.

Fundamental Support

Along with technical support, market development activities are a fundamental part of USW’s work promoting U.S. wheat in overseas markets with funding from USDA’s Foreign Agricultural Service (FAS) and its state wheat commission members. Some of the most popular activities conducted annually in the United States include trade teams and short courses. The year 2023 saw a continued uptick in these activities and an increase in the number of customers participating. USW’s reach remains global with over 42 countries represented in trade teams and short courses this year alone

In 2023, USW sponsored 16 trade teams to the United States – a record number of teams in the last 13 years. Prior to this year, USW hosted an average of 11 trade team visits per year. Not only did we break records in 2023, we also welcomed the first team of high-level Chinese buyers to the United States since 2014, and the first EU team since 2015.

USW's North Asia Board Team was made up of U.S. wheat farmers who traveled to the Philippines, Japan and South Korea to meet customers.

USW’s North Asia Board Team was made up of U.S. wheat farmers who traveled to the Philippines, Japan and South Korea in March to meet customers and learn how U.S. wheat is used by flour millers and bakeries in different markets.

Partner Short Courses

Trade and technical short courses hosted by USW partner organizations including Wheat Marketing Center, Northern Crops Institute, and IGP International are also popular activities with overseas customers. While the number of courses USW offered remained steady, 2023 saw the most customer course participants in the last 5 years. From sponsoring 75 participants in 2018 to 100 participants in 2023, USW offices continue to make in-person customer training a priority.

Miguel Galdos, USW Regional Director, South America, noted “this was most activities we have conducted in 40 years!”

Three buyers’ conferences also landed spots on the USW market activities calendar in 2023. The South and Southeast Asia Wheat Marketing Conference, Latin American Buyers Conference and North Asia Marketing Conference brought together customers from 7 different regions.

October and November 2023 kept the overseas offices busy with Crop Quality seminars. USW sent staff and U.S. industry experts across the world including Africa, Central America, Asia, Europe, South America, and the Middle East to share crucial information about the quality of 2023 U.S. wheat crops. Consultants, state administrators, farmers, and USW technical staff presented almost 30 seminars in 26 countries. All these seminars took place in-person with full teams of speakers. That has not happened since before 2018.

Looking Ahead

As the long-term funding from ATP ends, USW continues to promote U.S. wheat with funding from the Market Access Program, Foreign Market Development, and other FAS export market development programs with essential support from U.S. farmers. Looking ahead, USW is now applying for additional export promotion funding under a new FAS Regional Agricultural Promotion Program (RAPP) that, if awarded, will allow USW to maintain a higher level of trade and technical service for customers that add exceptional value to U.S. wheat imports.

By USW Director of Programs Catherine Miller

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Meeting Customers Important to U.S. Wheat Industry

U.S. Wheat Associates (USW) Chairman Michael Peters traveled to eight countries this year, meeting with customers and potential customers of U.S. wheat in an increasingly competitive global market. “What I learned is that our customers really value the chance to talk to American farmers, the chance to learn about where the wheat they purchase comes from,” said Peters, who grows wheat and raises cattle in Okarche, Oklahoma. “At the same time, the discussions I had this year in places around the world helped me learn about where our wheat ends up and how it is used.”

In this short video, Peters, who is six months into his tenure as Chairman, reviews 2023 and looks ahead to 2024 . . .

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The purchase by China of 1.12 million metric tons (MMT) of U.S. soft red winter (SRW) wheat for delivery in 2023/24 between Dec. 4 and 8 is a significant and, in terms of its volume, somewhat unexpected factor in the current market. The buyers clearly took advantage of a price opportunity, yet there are other influencing factors behind this buying surge to consider.

Already in the Market

China is in a wheat-buying phase driven in part by reported damage to its 2023 crop from rain at harvest. USDA expects China to exceed its WTO-agreed 9.6 MMT tariff rate quota again in 2023/24. By late November, China had already purchased a total of 1.01 MMT of four U.S. wheat classes, including 789,000 MT of SRW in 2023/24.

The U.S. Wheat Associates (USW) Price Report on Nov. 22 estimated SRW FOB export price out of the Gulf at $250 per MT, and on Nov. 30 at $258 per MT, a very competitive price relative to other wheat origins.

After the recent deals through Dec. 8, total 2023/24 SRW commercial sales to China to date now exceed 1.9 MMT. As a result, USDA raised its Dec. 8 estimate of total SRW sales in 2023/24 by about 817,000 MT to 4.76 MMT. If realized, that would be the largest volume of SRW exports since 2013/14.

A Trusted Source

Portrait of USW Regional Vice President Jeff Coey.

Jeff Coey

Why so much SRW? USW Regional Vice President Jeff Coey suggests that China’s buyers and flour millers are very familiar with this soft wheat class grown in the eastern third of the United States.

“It is a story that goes back decades,” said Coey. “First, our SRW is closest to the wheat grown in China. And the investment U.S. wheat growers have made in USW’s trade and technical service over many years has given Chinese buyers the confidence to import SRW, and other classes, when the opportunity arises.”

Coey said maintaining that education process was the goal behind USW’s investment of Agricultural Trade Promotion (ATP) program funds to bring a team of Chinese buyers to the United States in early November 2023. The visit included in-depth time with Federal Grain Inspection Service inspectors at an export elevator in Houston, Tex., as well as time with a SRW farmer and officials at USDA’s Agricultural Research Service (ARS) Soft Wheat Quality Lab (photo above) in Ohio.

“Those visits in particular were instructive,” said Coey. “Understanding the third-party inspection and certification process and the testing demonstrated at the ARS lab gave the buyers a sense of the design behind the quality data we share with them.”

Three people examine cookies at the USDA-ARS Wheat Quality Lab in Wooster, Ohio, in Nov. 2023.

Quality testing at the USDA-ARS Wheat Quality Lab in Wooster, Ohio, includes cookie spread testing, demonstrated during a November visit for a Chinese wheat buying team.

On the Ground Input

Ohio farmer and USW director Ray Van Horn was in the middle of his corn harvest when the Chinese buyers visited his farm.

“Ray and representatives of our member state wheat commission Ohio Corn and Wheat hosted the team on a crisp, clear afternoon in one of Ray’s fields with a beautiful, new stand of soft red winter wheat. It was a perfect place to share information about the wheat production decisions he makes and how that may affect buyers,” Coey said.

Ohio farmer Ray Van Horn talks with Chinese wheat buyers in his field planted with soft red winter wheat.

In a field seeded with a 2024 soft red winter wheat crop, Ohio farmer Ray Van Horn (right) discusses how he makes decisions and manages his crops with members of a Chinese wheat buying trade team sponsored by USW and hosted by Ohio Corn & Wheat in early November.

Adding value to this buying opportunity is the fact that U.S. farmers produced two large SRW crops with excellent quality in 2022 and 2023.

“Together all these factors helped build the confidence that these buyers can select U.S. soft red winter this year and have a deep supply of consistent quality with a ready domestic market,” Coey concluded.

By USW Vice President of Communications Steve Mercer

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An extended closure of the Columbia Snake River System (CSRS) is scheduled from January 14 to March 29, 2024, to replace major components at the John Day and McNary dams (see above) on the Columbia River, and at the Lower Monumental, Little Goose, and Lower Granite dams on the Snake River.

Similar extended closures occurred in 2010 and 2016. This maintenance to be performed represents a forward-thinking investment by the U.S. Army Corps of Engineers to assure this critical waterway remains operational for decades to come. The additional improvements will help the U.S. wheat export supply system remain the most reliable in the world.

A Partner in USW

U.S. Wheat Associate (USW) recognizes that the river system upgrade raises questions for customers sourcing U.S. wheat off Pacific Northwest (PNW) ports. Experience during the last two closures shows the PNW supply system will use every logistical option to keep wheat flowing to export elevators. USW stands ready to partner with buyers to help manage any impact related to the extended closure.

Grain barges in a lock at one of the dams on the Columbia Snake River System in Washington state.

Lowered for Navigation. Barges loaded with U.S. soft white wheat are about to exit downstream from a lock on the Columbia Snake River System. which must be operational for the river system to function. Each of the 8 locks on the system must be operational for safe, efficient barge navigation. U.S. Wheat Associates photo.

The Supply Chain Is Ready

About 75% of annual PNW soft white (SW) and club wheat exports are barged on the CSRS and Willamette Rivers. Knowing the CSRS will be closed during the upgrade, exporters, grain originators, barge operators, railroads, and trucking lines are prepared to minimize interruptions and costs. Some options included:

  • Pre-positioning the maximum number of barges to load wheat before the extended closing.
  • Moving more rail cars and locomotives into the region to manage increased demand from rail-loading interior elevators.
  • Pre-positioning more SW and club in Columbia River District export elevators before the closure.
  • Loading SW in barges from elevators below the John Day dam during the closure.
  • Coordinating truck delivery from the Willamette Valley, south of Portland.

Consult with USW and PNW exporters to help smooth any logistical challenges.

Preparation Will Also Benefit Buyers

USW believes there will be sufficient volume of all U.S. wheat classes normally available from the PNW. Buyers can also help lower the risk of interruption and minimize potential costs by taking a longer view of their supply chain needs. USW advises its customers to consider:

  • Consulting with PNW exporters to help give exporters more time to respond to your needs and to manage logistical challenges.
  • Scheduling a meeting soon with a local USW representative to identify buying strategies that fit those specific needs and capabilities.
  • Analyzing inventory needs and logistical capabilities.
  • Increasing SW wheat and/or flour storage capacity.
  • Increasing SW purchase cadence before the closure.

Working Together

As an objective voice for U.S. wheat producers, USW values the trust customers have in our products and service. Our focus remains fixed on helping buyers, millers, and food processors learn how to grow their enterprises using our wheat. Working together, we believe we can help ease any concerns related to the 2024 extended closure and strengthen our partnership. USW looks forward to assisting you now, as always.

For more information, contact your country or regional USW office, and visit the Pacific Northwest Waterways Association online.