Rediscover Wheat - January 2016

TM

The official publication of the Kansas Wheat Commission and the Kansas Association of Wheat Growers

JANUARY 2016

INSIDE THIS ISSUE

Opportunities for Wheat in South America Complexity of Gluten 10 Reasons to Thank a Kansas Wheat Farmer Her AgriCULTURE Story

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In This Issue :

TM

Volume 3 • Number 1 www.rediscoverwheat.org The official publication of

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1990 Kimball Avenue Manhattan, Kansas 66502 (785) 539-0255

KAWG MEMBERSHIP $100 per year

EDITOR

Marsha Boswell • mboswell@kswheat.com

ASSISTANT EDITOR/DESIGNER Nicole Lane • laneinicole@gmail.com

CONTRIBUTORS

Julia Debes • juliadebes@gmail.com Jordan Hildebrand • jhildebrand@kswheat.com

CEO

Justin Gilpin • jgilpin@kswheat.com

KAWG OFFICERS PRESIDENT Michael Jordan • Beloit

VICE PRESIDENT Kenneth Wood • Chapman SECRETARY/TREASURER Justin Knopf • Salina IMMEDIATE PAST PRESIDENT Gary Millershaski • Lakin

KWC OFFICERS

CHAIRMAN Jay Armstrong • Muscotah VICE CHAIRMAN Brian Linin • Goodland SECRETARY/TREASURER Mike McClellan • Plainville IMMEDIATE PAST CHAIRMAN Scott Van Allen • Clearwater

Rediscover Wheat is published by the Kansas Association of Wheat Growers (KAWG) and the Kansas Wheat Commission (KWC), 1990 Kimball Avenue, Manhattan, Kansas 66502, twelve times per year.

Contents of this publication may not be reprinted without permission.

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Kansas Wheat Growing Conditions are "Beautiful" Fundamentals Signal Opportunities for Kansas Wheat in South America

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Complexity of Gluten Discussed at Kansas Wheat Innovation Center

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10 Reasons to Thank a Kansas Wheat Farmer Sharing Thanks and Bounty, Not Just During the Holidays Her AgriCULTURE Story: Wisdom, Stewardship, Heritage Recipe: Strawberry Cream Chocolate Cupcakes News from the National Association of Wheat Growers Recipe: Bacon Onion Baby Brioche News from U.S. Wheat Associates

Recipe: Whole Wheat Chocolate Peppermint Drop Cookies

27 Maltby Market Analysis 32 Upcoming Events

Kansas Wheat Growing Conditions are “Beautiful”

By Jordan Hildebrand

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cy conditions were abundant statewide over the Thanksgiving weekend, but with a predicted warmer than normal winter on the way, what lies in store for the Kansas wheat crop?

With a wetter than average November, farmers in central and western parts of the state have found themselves in a position they haven’t experienced in years: having a healthy looking start to their wheat crop.

Scott Van Allen, a wheat farmer from Clearwater, reported that even though his wheat growth is a little larger than he usually likes to see at this point, the crop so far looks great. While Van Allen isn’t sure if this early growth will translate into bushels next summer, he did say the three inches of precipitation he received from the late November storms have left his wheat happy.

“I haven’t seen this much early growth in years,” said Van Allen. “It’s been so dry for so long it’s a switch to actually have some fall moisture.”

Beloit farmer Michael Jordan added that the wheat in his area is looking terrific, as well. Jordan said he noticed a later emergence this year, but the .55" of precipitation he has received since November 25 has helped to satiate the area’s crop.

“Everything looks refreshed and pretty,” Jordan said. “However, that means the weeds are looking pretty healthy, as well.”

While this may be a good start for central and western Kansas farmers, the south eastern portion of the state has seen reports of being too wet. Even though these farmers had a dryer than average October, some areas saw almost 8" of precipitation in November.

Aaron Harries, Vice President of Research and Operations at Kansas Wheat, emphasized that for the majority of wheat growers in the state, growing conditions are “beautiful.”

“These conditions really allow for strong root growth,” said Harries. “Building a solid foundation for the wheat plant is vital for a successful crop.”

Farmers should remember that this growing season is part of an El Niño pattern, so far among the strongest on record. Farmers in Oklahoma are also seeing an influx of precipitation in 2015.

As of December 1, some areas are seeing up to a 30 inch increase in moisture in comparison to the same date in 2014.

While last year’s lack of moisture can be attributed to the drought conditions found across the Great Plains, this year’s increase is directly tied to the El Niño.

To the north, states like Montana and the Dakotas were predicted to have drier than normal conditions due to the El Niño pattern, but Sioux Falls, S.D., just had its fourth snowiest November on record with 17.3 inches of snow. That is already more than half of the total snow that South Dakota received last winter. In light of these discrepancies, remember no two El Niños behave in the same way; these observations were trends, not guarantees.

Even still, farmers hold out hope for a wet winter that will help their crop thrive for next season.

“Everything looks really great right now,” Jordan said. “And I’m thankful for that.”

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Fundamentals Signal Opportunities for Kansas Wheat in South America

By Julia Debes

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rgentina may dominate the South American wheat market, but Kansas hard red winter (HRW) wheat is no insignificant player. Together with U.S. Wheat Associates (USW), the industry’s export market development arm, Kansas wheat farmers are building markets in the Southern Hemisphere.

Casey Chumrau recently transitioned to the marketing manager of the USW South American Regional Office in Santiago, Chile, from her previous position as the USW market analyst in Arlington, Virginia. Fresh from her first Association of Latin American Millers (ALIM) meetings November 15 to 18, 2015, in Buenos Aires, Argentina, she shared her perspectives on the region’s potential.

The Players The USW South American Regional Office in Santiago, Chile, covers six countries: Bolivia, Brazil, Chile, Colombia, Ecuador and Peru. Peru and Colombia consistently purchase the most HRW wheat in the region, at respective annual averages of 14.3 million bushels (390,000 metric tons) and 12.5 million bushels (340,000 MT).

“In the last 10 years, about 16 percent of all HRW exports have gone to the six countries in this region,” Chumrau said. “The population is growing and the economic situation improving in many of the countries. Those two things, combined with the longstanding relationship USW and U.S. wheat farmers have with customers here, provide a very optimistic outlook for increased HRW sales.”

The largest overall wheat importer in South America is Brazil, but purchases from the United States vary greatly from year to year. Brazil has purchased an average of 55.1 million bushels (1.5 MMT) of U.S. HRW over the last five marketing years. However, Chumrau noted that annual imports from the United States ranged from zero in 2011/12 to 150.7 million bushels (4.1 MMT) in 2013/14.

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Brazil had already purchased 5.95 million bushels (162,000 MT) through the end of September, but varying factors in chief competitor Argentina will affect purchases the rest of the 2015/16 marketing year.

The Competition Argentina is the principal wheat exporter in the South American region, followed by smaller exportable supplies from Paraguay and Uruguay.

Geographic advantage is coupled with preferential treatment under the Mercosur trade agreement, which slaps an automatic 10 percent import duty on non-Mercosur wheat.

To further complicate the South American market this year, Chumrau said the strength of the U.S. dollar adds cost to U.S. wheat imports. As a result, HRW is still priced higher than abundant competing supplies of similar wheat classes, in spite of lower cash and export prices.

She reported the topic was discussed at this year’s ALIM meetings.

“The strength of the U.S. dollar came up over and over,” Chumrau said. “The dollar is so high right now that it has completely offset the reduction in wheat prices, providing less incentive for customers who want to buy U.S. wheat.”

It is important to note that the recent political situation in Argentina has not favored wheat farmers. Current President Cristina Fernández de Kirchner instituted policies that dissuaded farmers from planting wheat, including a program of restrictive export licenses. Mauricio Macri, elected as the new Argentinean president on November 22, has pledged to ease these restrictions. However, Chumrau explained more basic economic factors may offer a market opportunity for U.S. wheat farmers this marketing year.

“Assuming Macri keeps his promise, which is never a given in politics, the fundamental supply and demand situation in Argentina this year could naturally limit exports,” Chumrau said.

To start, USDA projected Argentina, currently harvesting their wheat crop, will produce 385.8 million bushels (10.5 MMT) of wheat this year, down 73.5 million bushels (2.0 MMT) from 2014/15. However, Chumrau said that estimate may be inflated as other analysts in country project production nearer to only 330.7 million bushels (9.0 MMT). USDA also projected Argentinian domestic consumption at 226 million bushels (6.15 MMT), making a significant increase in exports unlikely.

“Combined with exports, that would exceed the generous production estimate and Argentina does not have many reserve stocks from which to draw,” Chumrau said.

The Potential The three traditional Mercosur suppliers (Argentina, Paraguay and Uruguay) combined are projected to export 257 million bushels (7.0 MMT). Considering the entire South American region imported an average of 438.3 million bushels (12.2 MMT) per year over the past five marketing years, Mercosur exportable supplies will be insufficient to meet even average demand this year. Of note, Brazil alone is estimated to purchase 231 million bushels (6.3 MMT) in 2015/16. These supply/demand factors signal potential market opportunities for Kansas wheat farmers to supply South American needs, even before considering quality needs and miller preferences.

Watching for market opportunities and building the relationships needed to quickly take advantage of them is exactly why Chumrau and her USW colleagues are situated in South America. By regularly demonstrating the performance and quality of HRW to customers throughout the region, USW and Kansas Wheat further ensure Kansas HRW is positioned in the right place at the right time to meet the world’s demands.

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Complexity of gluten discussed at Kansas Wheat Innovation Center

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luten is a complex issue.

This was the subject of a December 8th “Wheat’s On Your Mind,” presentation by Jaime Sheridan, Molecular Biologist/Bioinformatics Specialist with General Mills.

About 45 constituents of the wheat industry attended the luncheon meeting, which was sponsored by the Kansas Wheat Commission.

or international standards. In the United States, a product can be labeled “gluten-free” as long as it has fewer than 20 parts per million. In Australia, the standard is fewer than 2 parts per million. This “contamination” level is of great importance because people with Celiac Disease can vary greatly in the amount of gluten they can tolerate.

Ms. Sheridan recently attended the 12th International Gluten Biotechnology Workshop, which was held in Perth, Australia, in September. She discussed gluten-related food disorders and quality as it relates to the different world niche markets. She also covered approaches being used to investigate the interactions between gluten quality and reactivity.

According to the National Foundation for Celiac Awareness, an estimated 1 in 133 or less than 1% of the population has Celiac Disease. That number is increasing, partially due to better testing methods. It is estimated that 83% of Americans who have celiac disease are undiagnosed or misdiagnosed with other conditions. There are no pharmaceutical cures for celiac disease. A 100% gluten-free diet is the only existing treatment for celiac today.

Gluten is a complex issue for a number of reasons.

First of all, there is no universal definition of “glutenfree.” There is also no standardized product testing

Sheridan shared an update on experimental celiac disease vaccines and treatment drugs, including a vaccine, which sequesters gliadin, and if approved,

General Mills' Jaime Sheridan speaks to a group of wheat industry leaders.

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would allow individuals with celiac disease to consume gluten. Other upcoming medications may allow some relief of celiac symptoms.

While only about 1% of the population has celiac disease and another .5% has a wheat allergy, Sheridan said that another 10-30% of people are avoiding wheat.

Discussion indicated that there is a need to educate those people that gluten-free foods aren’t healthier than their gluten-containing counterparts.

Gluten-free products oftentimes contain more calories, sugar and sodium and cost more.

“It’s our responsibility to correct misinformation,” said Dr. John Floros, Kansas State University Dean of College of Agriculture and director of K-State Research and Extension. “We, as educational research institutions, do not have the resources.” He went on to say that large food companies do have money to spend on advertising, and all facets of the industry should work together. “If we spend money to educate consumers at an early age, we could make a difference,” he said.

Sheridan did her graduate work at UNC Charlotte in Bioinformatics and Computational Biology with targeted projects focusing on miRNA discovery and expression in oat, broccoli, and soybean. Since joining General Mills, her focus has shifted from oats to wheat. She works on collaborative projects with K-State and others at the Kansas Wheat Innovation Center, where she has her office.

Wheat’s On Your Mind is an informal, occasional gathering of wheat professionals in the Manhattan and Junction City areas. It gives like-minded individuals a chance to exchange wheat news and notes.

10 Reasons to Thank a Kansas Wheat Farmer Kansas wheat farmers work hard each year to grow the nation’s largest supply of high quality hard red winter wheat. In turn, we at Kansas Wheat match that commitment to excellence. Join us this holiday season as we thank all who contribute to the success of Kansas Wheat and the National Festival of Breads. Here are some of our top highlights from 2015: 1. Record Yields in Kansas Wheat Yield Contest Two of the three winning entries in the Kansas Wheat Yield Contest yielded more than 100 bushels per acre. Central regional winter Darren Nelson from Hutchinson yielded 108.48 bushels per acre with a blend of T158 and Everest. And Western regional winner Darwin Ediger from Meade yielded 103.18 bushels per acre with WB 4458 as well as the top prize for wheat quality. Not to be outdone, Doug Queen from Rossville, winner of the Eastern region, yielded 70.3 bushels per acre with Armor. All three winners credited management practices with achieving such high yields during such a turbulent growing season.

2. National Festival of Breads Benefits More than Finalists Nearly 1,000 individuals attended the 2015 National Festival of Breads in June. Eight finalists from across the country competed, but Lisa Keys from Kennett Square, Pennsylvania, took the top prize with her Smokehouse Cranberry Cheese Bread. In addition to tasting some great bread, attendees donated more than 654 pounds of food to the Flint Hills Breadbasket. An additional $3,500 was raised to support the Flint Hills Breadbasket and the “Baking the World a Better Place” campaign, a joint effort of Red Star Yeast and Stop Hunger Now. We are particularly thankful for all our sponsors, including King Arthur Flour, Red Star Yeast, the Kansas Soybean Commission, C&H Sugar/ Domino Sugar and Farmer Direct Foods.

3. Farmer-Funded Research Explores New Technology, Genetic Sources Kansas wheat farmers invested in fundamental research projects at the K-State wheat breeding programs in Manhattan and Hays, including wild and novel genes, marker-assisted selection, doubled haploids, high throughput phenotyping and a genomic selection model. Researchers are even using small unmanned aerial systems, commonly referred to as drones, to measure plant health and yield potential.

4. Kansas Wheat Alliance Varieties Top Planted in State The February 2015 “Kansas Wheat Varieties” report from the USDA National Agricultural Statistics Service reported that Kansas Wheat Alliance varieties, developed by Kansas State University, topped planting across the state. Everest was the top hard red winter wheat variety planted, accounting for 15.8 percent of the state’s 2014/15 wheat crop. Danby was the top hard white winter wheat variety planted, accounting for just less than 50 percent of the state’s white wheat production.

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Sharing Thanks and Bounty, Not Just During the Holidays

By Julia Debes

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s Kansas farmers gather with their families this holiday season, they may not know of one gift continuously given for more than 60 years – their wheat donated as food aid. From a Cheyenne County Farm Bureau meeting to the top commodity delivered as aid, Kansas wheat farmers have a proud history of helping the world’s neediest not just in December, but all throughout the year.

Wheat plays an important role in the world’s diet, providing approximately 20 percent of total caloric intake. However, many of the countries where population is growing the fastest are import-dependent, meaning they do not produce enough wheat (if any at all) to feed their own populations. Add to that natural disasters and other situations around the world where emergency food supplies are desperately needed.

In September 1953 at his local Cheyenne County Farm Bureau meeting, Peter O’Brien presented the first forethought of donating some of surplus Kansas grain to those in need. In 1954, U.S. Senator Andy Schoeppel, a Kansas Senator, sponsored the precursor to today’s food aid programs as legislation, which was later signed by another Kansan, President Dwight D. Eisenhower.

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Today, the main programs the United States utilize to deliver commodities like wheat overseas are P.L. 480 Title II, better known as Food for Peace, and the Food for Progress program. Through these programs, the United States supplies in-kind donations of food products, including wheat and wheat flour, both in times of emergency and as part of helping build a more food secure world. Wheat is the top commodity utilized in food aid, “making up roughly 40 percent of all in-kind food aid from the United States each year,” according to a recent U.S. Wheat Associates (USW) fact sheet.

As explained by USW Policy Specialist Elizabeth Westendorf, the Food for Peace and Food for Progress programs shipped more than 200,000 MT of wheat last fiscal year, the majority of which was hard red winter wheat.

Wheat is donated both as an in-kind donation and used as part of monetization programs. Monetization refers to the sale of in-kind donations of U.S. food commodities in recipient countries for local currency.

Through monetization, the United States, through USDA and USAID, provides food commodities, like wheat, to a cooperating sponsor, a recipient government or a non-governmental organization. The recipient then

can sell that commodity to local processors or traders and the proceeds can be used for developmental projects like public infrastructure.

For example, Food for Progress monetized 40,000 MT of hard red wheat in Ethiopia in 2014. Of that total amount, the Ethiopian Lemlem Food Complex purchased 35,000 MT, which it used to introduce the superior quality of U.S. wheat to its customers. ACDI/ VOCA, a nongovernmental development organization, used the funds from that purchase to finance $9.2 million of its Feed for Enhancement for Ethiopian Development project. Even better, the owner of the Lemlem Food Complex now has plans to build a pasta factory and could turn into a regular customer of U.S. wheat.

These food aid programs go a long way to feed the world’s insecure. During the 60th anniversary of Food for Peace in 2014, the program was credited with saving more than three billion lives in 150 countries around the world. Yet, despite these long-term results, food aid is often under attack. For example, the 2014 Farm Bill did continue to support both in-kind donations and monetization. However, the legislation added emphasis on cash- or voucher-based programs like local and regional purchasing.

According to the USW fact sheet, “Food for Peace cash and voucher programs, as well as local and regional purchasing, are important for emergencies, when delays in the arrival of in-kind food would result in humanitarian crises, and are reasonable alternatives for countries less able to share their in-kind bounty.”

The U.S. wheat industry supports this flexible approach to food aid, but works hard to make sure commodity-based donations remain included, not just cash.

After all, according to President John F. Kennedy, “Food is strength, and food is peace, and food is freedom, and food is a helping to people around the world whose good will and friendship we want.”

5. Spokespersons Share Love of Wheat The Speak for Wheat spokesperson team continues to share wheat and wheat foods education at events across the state. The team includes relative newbies like Anita DeWeese from Pratt, who officially started as a spokesperson in spring 2015, as well as long-time supporters like Melanie Eddy from Syracuse, who started demonstrating breads in 1986.

6. TPP Agreement Completed, Opening Markets for Kansas Wheat Kansas is the top-producing hard red winter (HRW) wheat state. And more of that high quality wheat is exported from our state than any other commodity. Thanks to new agreements like the Trans-Pacific Partnership (TPP), completed this fall, Kansas wheat will have even more global market access. Overall, the TPP agreement will eliminate tariffs on U.S. wheat and wheat products exported to 11 countries, including Japan, Vietnam and Malaysia.

7. Yields Increase, Quality Average The overall average yield for wheat increased in 2015 to 37 bushels per acre, up from 28 bushels per acre in 2014, according to the USDA National Agricultural Statistics Service (USDA NASS). Average protein content did decrease to 12.7 percent from 13.4 percent the year before, but still remained above the 10-year average of 12.4 percent. Overall, Kansas wheat farmers produced more than 321.9 million bushels of wheat, enough to produce 23.5 billion loaves of bread.

8. Taiwan Flour Mills Commit to Buying Kansas Wheat Demand from outside our borders help drive wheat prices, which is why Kansas Wheat works hard to build relationships with buyers from around the world. In September, Taiwan flour millers, as part of the biennial Agricultural Trade Goodwill Mission to the United States committed to purchasing 62.5 million bushels of U.S. wheat between 2015/16 and 2016/17.

The deal, which includes Kansas HRW wheat, is worth $544 million.

9. Honoring Kansas Cooperatives In October, Kansas Wheat shared stories of grain cooperatives who are making a big impact on the Kansas grain industry. The 85 farm marketing and supply co-ops in Kansas represent more than 82,600 voting members. Large and small, cooperatives invest in new infrastructure and services every year to help their members adapt to advanced technology and updated management practices.

10. Most Importantly – Thank You to Kansas Farmers The most important people we need to thank are the Kansas wheat farmers and their families. The more than 20,000 Kansas farmers who grow wheat across the state. That includes young farmers like Jeremy Millershaski from Lakin who are just starting their farming career and couples who have honed their farming operations for decades like Ross and Judy Kinsler from Kingman and Richard and Glenda Randall from Scott City.

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Her AgriCULTURE Story: Wisdom, Stewardship, Heritage F

ood is cultural. So is the way of life that produces it.

Women increasingly represent central roles in the agricultural heritage that builds and sustains communities throughout the world. According to the 2012 Census of Agriculture, women are the principal operators of 6,783 farms in Kansas, and there are 25,611 total women farm operators in the state. A principal operator is termed as the person in charge of the day-to-day decisions for the farm or ranch.

Experience a conference designed for women with a vested interest in a farm or ranch operation, whether they are owners, partners or beginners just starting in agriculture. Women Managing the Farm focuses on the active roles women play in all aspects of financial and risk management while also addressing the unique dynamics of the agricultural operation and the household.

Topics include: production, management, finances, legal, relationships and health.

The 2016 Women Managing the Farm Conference takes place Feb. 4-5 in Manhattan, Kansas. This year’s theme is Her AgriCULTURE Story: Wisdom, Stewardship, Heritage, with keynote speakers Bonnie Lynn-Sherow, associate professor of history, Kansas 10

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State University, Amy H. Gales, Executive Vice President, CoBank, Mykel Taylor, ag economist, Kansas State University and Mary Lee Chin, dietitian.

Sessions are designed to keep women informed of the latest advancements in the farming community, and networking sessions are tailored to agricultural partners, independent producers, helpers, absentee landowners, industry career women, business managers and women with family in the military.

Pre-conference workshops will also be offered on February 3 and will focus on “Harnessing the Power of Excel,” “Amazing Grazing III: How to Handle Cattle...Without Getting Handled” and “Growing Grain Knowledge: Safety from Farm to Plate.” Women Managing the Farm conference information, registration and scholarship applications are available at womenmanagingthefarm.info or by calling 785-532-5569

Strawberry Cream Chocolate Cupcakes Ingredients

Cupcakes 1 15.25-oz chocolate cake mix + ingredients needed according to cake box directions 1 8-oz cream cheese, softened 1 egg 1/3 cup sugar 1/3 cup strawberry jam Frosting 12-oz semi-sweet mini chocolate chips 1 cup heavy cream

Directions

Cupcakes 1. Preheat oven to 350째 F and prepare pans with cupcake liners.

2. Make chocolate cake mix batter according to box directions.

3. Using a large ice cream scoop, fill cupcake tins 2/3 full with batter.

4. In mixing bowl, blend together the cream cheese, egg and sugar until well combined.

5. In a glass bowl, microwave the strawberry jam 30 seconds; stir until smooth.

6. Gently swirl the strawberry jam into the cream cheese mixture.

7. Using a small ice cream scoop, drop strawberry cream cheese mixture into each cupcake tin.

8. Bake 18-22 minutes, or until the top of the cupcake bounces back when tapped.

9. Cool completely and frost with Whipped Chocolate Ganache frosting and decorate as desired.

Frosting 1. Place chocolate chips in a large bowl.

2. Heat heavy cream until it comes to a boil.

3. Remove from heat and immediately pour over chocolate chips.

4. Stir until completely mixed and glossy.

5. Refrigerate until slightly cold then whip until light and fluffy.

6. Pipe frosting onto cupcakes and decorate as desired.

Nutrition Information

Yields: 24 standard-size cupcakes

Nutrition information per serving (1 cupcake, 80g): 270 calories, 16g fat, 1g fiber, 8g saturated fat, .5 trans fat, 30g carbohydrates, 55mg cholesterol, 200 mg sodium, 4g protein, 0mg vitamin C, 1mg iron, 36mg calcium.

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News from : NAWG Weekly Updates December 3, 2015 Crop Insurance Fix Included in Highway Bill Conference Agreement, Action Needed Congressional negotiators finalized a conference agreement to reauthorize highway construction projects, officially calling it the Fixing America’s Surface Transportation (FAST) Act. The $305 billion conference agreement authorizes highway/ transportation programs for five years, authorizing and funding projects related to the construction and repair of roads and bridges as well as transit and passenger rail. Additionally, the conference would allow for an exemption from the hazardous materials endorsement requirement for an employee of a custom harvester operation with a Class A CDL if the vehicle is transporting diesel in a quantity of 1,000 gallon or less and if it is clearly marked as flammable or combustible.

Additionally, the bill includes language nullifying the $3 billion cut to the crop insurance delivery RediscoverWH WH E AT| January | January 2016 1212Rediscover E AT 2016

system that was included in the budget agreement last month.

This critical provision, Section 32205, reverses a cut that would have the effect of making the delivery of the crop insurance program more expensive, lead to consolidation and fewer options in the industry, and drive up premiums for producers. The House of Representatives approved the conference report on a 359-65 vote.

There is a strong possibility that there will be a point of order raised in the Senate against the inclusion of the crop insurance provision, which could mean there will be a vote to waive the point of order. We urge NAWG members to contact your Senators as soon as possible and urge them to support crop insurance, support waiving any point of order against the crop insurance provision, and to ultimately support the highway bill.

NAWG Urges House to Support STB Reauthorization Bill NAWG joined a broad coalition in a joint letter urging the U.S.

House of Representatives to support S. 808, the Surface Transportation Board (STB) Reauthorization Act of 2015. The bill, which was introduced by Senate Commerce Committee Chairman John Thune (R-SD) and passed the Senate by unanimous consent on June 18, is the first STB reauthorization bill since 1995.

Specifically, the legislation includes transparency requirements for the operation of the Board, would increase the Board from three to five members, and it would enable the Board to initiate investigations on its own without having to wait for a formal complaint. A copy of the coalition’s letter is available at http://www.wheatworld.org/wpcontent/uploads/RCC_Coalition_ Letter_to_House_STB_Dec_2015. pdf.

CRP General Sign-up Begins On December 1, USDA began General sign-up 49 for the Conservation Reserve Program (CRP). CRP, celebrating 30 years of enrolling environmentally sensitive lands into the program, was reduced in total acres by the 2014 Farm Bill. Over the

life of the Farm Bill, CRP will decline from 32 million acres to 24 million acres enrolled each year. The reduced acreage cap is likely to lead to move competitive applications. To find out more about the general sign-up from December 1 to February 26, or ongoing continuous sign-up options, contact your local FSA office.

Commodity Classic Housing Deadline Next Week Commodity Classic—America’s largest farmer-led, farmerfocused convention and trade show—is scheduled for March 3-5, 2016 in New Orleans, La. America’s wheat growers will come together with corn, soybean, and sorghum growers, the Association of Equipment Manufacturers, industry associations, agribusinesses and farm media at the event to network, meet industry thought leaders, share ideas, learn about new technologies and conduct association business.

A separate block of rooms has been reserved for NAWG members. To ensure your housing needs at the event are met, please contact Liz Leith at finance@ wheatworld.org or (202) 547-7800 with your arrival and departure dates, bed preferences and any additional needs no later than December 9. After that date, the rooms will be released to general attendees and NAWG cannot guarantee availability for its members. For more information about Commodity Classic or to register, please visit http://www. commodityclassic.com/home.

Registration Opens for Winter Wheat Conference Registration is now open for the NAWG/USW Join Winter Wheat Conference, scheduled for February 3-6, 2016 at the Hyatt Regency Capitol Hill in Washington, D.C. Please visit https://www.regonline. com/Register/Checkin. aspx?EventID=1788828 to register.

In additional to regular business and committee meetings, meeting participants will have an opportunity to network with industry partners and Congressional staff at NAWG’s annual Congressional reception co-sponsored by BNSF and hear from national leaders including Ambassador Darci Vetter.

A block of rooms is reserved at the Hyatt Regency Capitol Hill for meeting attendees. The deadline to reserve rooms at the conference rate of $219/night is Monday, January 4, 2016.

December 10, 2015 Congress Completes Action on STB Reform Bill; Heads to President The U.S. House of Representatives approved S. 808— the Surface Transportation Board Reauthorization Act of 2015. This action follows the Senate passing the legislation by unanimous consent in June. NAWG President Brett Blankenship thanked the House for taking this action, saying, “I applaud the House for following the Senate’s lead in passing this important legislation, and I thank Chairman Thune for writing these reforms to the functioning of the Surface Transportation Board.”

This legislation, authored by Senate Commerce Committee Chairman John Thune (R-SD) and Ranking Member Bill Nelson (D-FL), contains several important changes to the structure of the STB, including an increase in its members from three to five members; transparency requirements to ensure the reporting of the nature and disposition of complaints considered by the Board; the establishment of a voluntary arbitration process to resolve disputes; and the new ability of the Board to initiate investigations without having to wait for a formal complaint to be filed.

The bill now heads to the President for his signature.

White House Seeks to Raise the Profile of Careers in Agriculture The Office of the President of the United States, the U.S. Department of Agriculture (USDA), the U.S. Department of Energy and the U.S. Department of Education (DOE) together hosted a meeting at the White House to explore solutions aimed at increasing the profile of agriculture among college students. NAWG joined 140 attendees from all parts of U.S. agriculture—including representatives from land grant colleges, private industry, commodity associations, National FFA and 4-H and more—to provide insight in how to best address the issue.

Officials from the Department of Education presented data for 2015 showing 57,900 agricultural jobs were posted but only 35,400 qualified graduates were available Rediscover E AT 2016 RediscoverWH WH E AT| January | January 201613 13

to apply. The USDA and the DOE showed the demand for multi-disciplinary degrees for agriculture will only increase as the industry is challenged to produce more food in a time of increasing weather effects from climate change. This job demand is also expected to multiply simultaneously as the baby boomers enter retirement age.

The workforce challenge facing agriculture over the next several decades is significant and all the agencies represented at the event stressed the need to encourage young students entering college to consider pursuing technical degrees in agriculture.

NAWG Participates in Industry Sustainability Event NAWG participated in a session with General Mills Supply Chain Executive Vice President John Church regarding wheat sustainability during a side event at the United Nations Climate Change Conference in Paris, France. The event—co-hosted

by Field to Market and BSR— brought together representatives from wheat, corn, soy and potatoes grower organizations and food companies working on sustainability projects.

NAWG Environmental Policy Advisor Keira Franz presented on behalf of wheat growers at the event, discussing wheat production and profitability, stressing the importance of continued investment in research and highlighting wheat growers’ sustainability efforts.

Secretary Vilsack kicked off the event by highlighting the important work of Field to Market and discussing information USDA 14Rediscover RediscoverWH WH | January 2016 14 E EATAT| January 2016

was releasing later in the day regarding climate and agriculture.

As part of the Administration’s commitment on climate change, USDA has agreed to reduce agricultural emissions and enhance carbon sequestration of 120 million metric tons of CO2 equivalent each year by 2025.

USDA’s crop efforts will focus on using voluntary incentivebased programs and practices to improve soil health, nutrient stewardship and conservation of sensitive lands and several other efforts focused on livestock, grazing lands and forest lands.

For more information regarding NAWG’s sustainability efforts, please visit http:// www.wheatworld.org/issues/ sustainability/.

Auction Items Needed for 2016 WheatPAC Event WheatPAC, the political action committee of the National Association of Wheat Growers (NAWG), will be conducting its annual fundraising event at the 2016 Commodity Classic in New Orleans. The WheatPAC Reception & Auction will be held on Wednesday, March 2, from 7:00 – 10:00pm. Participation is restricted to members, staff and industry partners of NAWG and state wheat organizations affiliated with NAWG and their family members. WheatPAC is requesting donations of items by both state wheat organizations and industry partners for both the silent and live auctions. For ideas about top-selling items, more information, or to become a NAWG member so you can attend the event, please contact Liz Leith at finance@wheatworld. org. Tickets for the WheatPAC

Reception & Auction will be available for purchase through the NAWG Annual Meeting registration webpage and onsite in New Orleans. Stay tuned for additional details.

December 17, 2015 FY 2016 Omnibus, Tax Agreement Reached, Congressional Action This Week Congressional negotiators released the text of an agreement to fund the government for the remainder of fiscal year 2016 and to make permanent a number of important tax provisions. The House of Representatives has taken the first step by approving the tax package, and consideration of the omnibus appropriations bill is expected. Following House action, the Senate is expected to take up both bills.

The FY 2016 omnibus appropriations bill increases discretionary spending for agriculture appropriations by $925 million above the FY 2015 enacted level to $21.75 billion.

This includes $2.94 billion for agricultural research programs, including the Agriculture Research Service and the National Institute of Food and Agriculture.

Competitive research grants through the Agriculture and Food Research Initiative are funded at $350 million. The Hatch Act program is funded at $243.7 million and Smith-Lever extension activities are funded at $300 million.

In terms of tax provisions, the bill includes a permanent extension of Section 179 at the $500,000 expensing limitation

level (the phase-out amount is at the $2 million level). Additionally, these amounts will also be indexed for inflation beginning in 2016. The bill also includes an extension of bonus depreciation for property acquired and placed into service during 2015 through 2019. The percentage is 50 percent for property placed into service during 2015, 2016, and 2017, and it phases down to 40 percent in 2018 and 30 percent in 2019. A section-by-section summary of the tax package can be found at https://rules. house.gov/sites/republicans.rules. house.gov/files/114/PDF/114SAHR2029Ex-SxS.pdf.

NAWG urges wheat farmers to contact your Members of Congress and Senators asking them to support the omnibus and tax package.

NAWG Concerned with Potential Impact of New Rules for Wheat Field Trials The U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) announced new regulations for field-testing of genetically engineered (GE) wheat.

The rule will require developers of GE wheat varieties to utilize the more stringent permit application process for field trials rather than the current notification process, beginning January 1, 2016.

“We respect USDA’s responsibility to oversee and regulate field trials of plants with genetically modified events but are concerned about the impact this rule change will have on wheat research and production,” says NAWG President Brett Blankenship, a wheat grower

from Washtucna, Wash. “As we indicated to USDA during the comment period, we are concerned that the new rules will increase the cost of compliance and potentially impede wheat research programs, especially among small, private companies and public institutions whose resources for wheat research are already stretched.”

“Given the unmatched safety track record of all current GE crops, we view the added regulatory hurdle as unnecessary and potentially burdensome to moving wheat forward, says NAWG Vice President Gordon Stoner, a wheat grower from Outlook, Mont. “There is no commercially available GE wheat in production, no GE wheat in any export channels, and no GE wheat varieties currently awaiting APHIS deregulation, so having USDA-APHIS categorize future GE wheat research field trials for added scrutiny is both puzzling and potentially inhibiting for those seeking much needed public and private research investments.”

NAWG Attends National Fusarium Head Blight Forum The U.S. Wheat and Barley Scab Initiative held its annual conference, the 2015 National Fusarium Head Blight Forum in St. Louis, Mo. The Forum is an integral component of the U.S. Wheat & Barley Scab Initiative.

Growers and grower group representatives, millers and other food processors, consumers, and scientists – public and private, took part in the proceedings, including staff from NAWG. A robust agenda included presentations from scientists

working on Fusarium Head Blight (Scab). Fusarium Head Blight has plagued wheat producers for several decades and is considered by many as the number one enemy of American wheat and barley growers. The disease inflicts yield and quality losses on farms in most of the wheat producing states across the U.S. Farmers, grain handers and food companies throughout the U.S. incur losses from the cost of dealing with the toxincontaminated grain that often accompanies scab infection.

Additional information about the Initiative and its annual forum are available at http://scabusa. org//forum15.

National Wheat Improvement Committee Holds Annual Meeting The National Wheat Improvement Committee (NWIC) held its annual meeting immediately following the National Fusarium Head Blight Forum in St Louis, Mo. The Committee consists of public and private wheat researchers, growers, and representatives of NAWG and the milling and baking industries. Members equally represent all classes of wheat in the U.S. NWIC’s 24 members discussed research needs for wheat across all regions of the U.S. NWIC also set the date for its annual fly in from March 1315, 2016 in Washington, D.C. There, NWIC will seek support to address critical needs in wheat research. NAWG encourages attendance by wheat committee members at the fly-in. Congress needs to hear clear, concise Rediscover E AT 2016 RediscoverWH WH E AT| January | January 201615 15

messaging from wheat researchers regarding wheat technology needs. Contact NAWG Director of Research and Technology Steve Joehl at sjoehl@wheatworld.org to join the fly-in.

Climate Agreement Reached Negotiations at the United Nations Climate meeting ended with an agreement between the 195 countries participating. The Conference of the Parties (COP) met in Paris during the first two weeks of December. COP21

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and the Paris Agreement, as it is called, seeks to hold the increase in global average temperature to below 2 degrees Celsius and to pursue efforts to limit the increase in temperature to 1.5 degrees Celsius. Each country will set their specific targets that will be periodically reviewed. Last year, President Obama released the U.S. commitment to reduce emissions by 26-28 percent below 2005 levels by 2025. While the Paris Agreement does not specifically reference agriculture, it does address the importance of carbon

sinks.

The agreement will need to be ratified by 55 countries, representing 55 percent of emissions to become effective.

President Obama addressed the nation on Saturday after the agreement was reached and has indicated that Congressional approval of the Paris Climate Agreement is not necessary.

Bacon Onion Baby Brioche Ingredients

½ cup skim milk 1 tablespoon fresh lemon juice ¼ cup warm water (100°- 110°F) 1 teaspoon granulated sugar 1 package active dry yeast ½ tablespoon dry minced onion 1 large egg 5 tablespoons butter, softened 1 tablespoon granulated sugar 1 teaspoon baking powder ½ teaspoon salt 3 cups King Arthur Unbleached All-Purpose Flour, divided ½ cup fully cooked real bacon bits 1 ½ ounces hot pepper Monterey Jack cheese (block; not shredded) Topping 1 large egg, beaten 1 tablespoon water 2-3 tablespoons finely crushed French Fried Onions

Directions

1. In measuring cup, combine milk and lemon juice; set aside. In small bowl, combine warm water and sugar; stir in yeast and set aside 5 to 10 minutes.

2. In mixing bowl, add milk mixture, yeast mixture, onion, egg, butter, sugar, baking powder, salt, and 1½ cups flour; beat 2 minutes on medium speed. Add bacon. Gradually add enough of the remaining flour to make soft dough. Beat 3 minutes on medium speed. Using dough hook, knead dough 4 minutes or until dough forms a smooth ball.

3. Grease 12 brioche or muffin cups. Cut cheese into 12 (1/8 ounce) cubes.

4. Divide dough into 12 equal balls; remove 1 teaspoon dough from each ball, forming 12 small balls. Place one large ball of dough into each cup. With finger, make a deep indentation in center. Place cheese cube inside indentation.

Place small ball in the indentation, lightly seal edges with fingertips.

5. Cover; let rise in warm place until double, about 45 minutes. In small bowl, beat together egg and water; brush on brioches. Lightly sprinkle with crushed onion crumbs.

6. Bake in preheated 350°F oven 20 to 25 minutes or until golden brown. Remove from baking pans after 3 to 5 minutes. Serve warm with soft butter.

Nutrition Information One brioche provides approximately 225 calories; 8 g protein; 27 g carbohydrate; .7 g dietary fiber; 10 g fat (5 g saturated); 55 mg cholesterol; 55 mcg folate; 2 mg iron and 358 mg sodium.

Makes 12 brioches.

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News from : December 3, 2015 Potential Problems in Southern Hemisphere Unlikely to Affect Wheat Market

By Stephanie Bryant-Erdmann, USW Market Analyst With a small portion of 2015/16 world wheat production still in Southern Hemisphere fields, KCBT hard red winter (HRW) wheat futures have fallen 34 cents since early November based on bearish fundamentals. Record global stocks and the strongest U.S. dollar in 12 years have combined with record low ocean freight rates to expand the reach of cheap Black Sea wheat, limiting HRW export demand.

Adding additional pressure to the markets is the relatively good condition of the U.S. winter wheat crop. In its Nov. 30 Crop Progress report, USDA’s National Agricultural Statistics Service (NASS) said winter wheat condition (including HRW) improved 2 percentage points from the prior week. The report rated 55 percent of the crop good to excellent compared to 58 percent in 2014 on the same date. Winter wheat emergence is also on pace with the 5-year average at 93 percent.

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Topsoil and subsoil moisture levels across the United States are also more favorable than last year, with notable exceptions in parts of the western states following the fifth year of drought conditions.

NASS rated overall topsoil moisture for the United States at 82 percent adequate or surplus levels, compared to 70 percent on the same date last year. NASS reported a similar trend with subsoil moisture, rating 75 percent as adequate or surplus compared to 67 percent in 2014.

These factors combine to make this a buyers’ market. To date, the only bullish price news for the 2015/16 crop comes from weather conditions attributed by some to El Niño effects in the Southern Hemisphere. That region accounts for an average of only about 7 percent of global wheat production but a very significant 19 percent of global wheat exports.

As of Nov. 26, the harvest in Argentina, which exports an average of 75 percent of annual wheat production, is 20 percent complete. That is significantly behind last year’s pace of 31 percent. Heavy rains that delayed harvest for much of November have also resulted in some quality downgrading according to Bolsa

de Cereales, the Argentina Grain Exchange. The International Grains Council (IGC) expects Argentina to harvest 10.4 million metric tons (MMT), which is 25 percent less than 2014/15, and attributes that change to less planted area.

The same heavy rains that delayed harvest in Argentina also affected Brazil’s southern wheat growing regions caused loss of yield potential and quality downgrades, according to the Dec. 1 International Grains Council (IGC) report. On average, Brazil imports 6.76 MMT of wheat with domestic production accounting for the other half of its annual consumption. Time will reveal its final quality, but a private agronomist recently told a Brazilian farm publication that, “This wheat crop is to be forgotten!” USDA currently expects Brazil wheat production to be similar to 2014/15 levels at 6.0 MMT, which is 10 percent greater than the five-year average.

However, the apparent quality damage in both Argentina and Brazil could lead to higher domestic wheat feeding in both countries and thus a need for more imports of milling wheat into Brazil from outside of the region.

In its December 2015 crop report, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) lowered its estimate for Australian wheat production to 24.0 MMT, down 5 percent from its September estimate, but still 1 percent higher than 2014/15 levels. Hot, dry conditions from the strongest El Niño in 20 years persisted across the country, though Reuters reports that adequate subsoil moisture prevented any significant yield potential decreases. Untimely rains in late October and November slowed harvest, but ABARES said the rain did not hurt overall crop quality.

Buyers and sellers will continue to watch the Southern Hemisphere harvest for late changes to wheat market fundamentals as the 2015/16 harvest wraps up.

However, with the much larger Northern Hemisphere winter wheat crop headed into dormancy, there appear to be few changes on the horizon to change the underlying fundamentals that are driving this global buyers’ market in wheat.

May the Fundamentals Be With You If you are a wheat importer, market fundamentals have given you a great gift this season: a reduction in the dollar cost of wheat to a level not seen for many years. Global supply is up, demand is relatively stable — though still near record levels — and bulk freight rates are down.

To be more specific, and even a bit bold, U.S. wheat represents a great buying opportunity.

Although it costs more to buy the dollars needed to import U.S. wheat, when you weigh all the factors that affect its value, U.S. wheat has much to recommend it.

What we say about our wheat is not an empty promise. U.S. wheat is the world’s most reliable choice. In a season of surplus and wide variability in prices, USW continues to make this case because U.S. wheat growers have consistently produced abundant supplies of excellent quality wheat and earned an enduring reputation for reliability and value over many years.

USW believes that a large number of customers from around the world continue to turn to the United States for wheat because buying it carries less risk. U.S. wheat quality is predictable and, as an objective third party, the Federal Grain Inspection Service (FGIS) certifies that all exported wheat meets import specifications. Their inspectors create a shipping inspection log that is available to the buyer as an additional risk management tool.

FGIS supervisors double-check the work of every inspector and periodically send working samples and equipment to their national technical center to be checked again. That makes a positive difference for wheat buyers around the world.

The U.S. wheat store also sells a wide variety of classes that are proven specific, high-quality ingredients for any end product need. U.S. soft red winter (SRW), for example, is an excellent, proven wheat for confectionary use and baguettes, while HRW is a consistently superior bread wheat

compared to Black Sea region crops. Each class offers inherent quality and functional value.

Moreover, no other wheat seller does more than the United States to add value to its wheat through customer support. At its very base, this support comes from the farmers who produce the wheat.

In good years and bad, U.S. wheat farmers have supported USW’s effort to work directly with buyers to answer questions and resolve issues in purchasing, shipping or using their six classes of wheat. With U.S. wheat, buyers also get professional technical assistance, education, information and personalized consulting that help strengthen overseas milling, storage and handling, and end product industries. As always, USW stands ready to help meet our customers’ needs (see Customer Service Demonstrates U.S. Wheat Value, below).

At a time when other wheatexporting countries are aggressively offering their product, it is easy to overlook other opportunities.

However, it really is a great time to reconsider the value of U.S. wheat given its full reliability, quality, service and advantages.

For more information, please contact your local USW representative.

Customer Service Demonstrates U.S. Wheat Value USW makes an on-going effort to help customers improve their processes and product quality.

Its work in the rapidly expanding South Asian region offers one example of how service increases true value of U.S. wheat.

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Incomes in South Asian markets are growing as large manufacturers add factories to produce electronics, automobiles and other goods for the export and domestic markets. Our example focuses on how USW is helping the cookie, cracker and other confectionery product sectors meet their growing opportunities.

New processing and retail entrants in these sectors are encouraging local businesses to improve their product quality and presentation.

Moreover, for these businesses, flour products milled from U.S. SW have the performance characteristics to help them meet the emerging demand.

Taking a step back, millers and some soft wheat end users traditionally look first at protein percentage when considering functional characteristics. In this case, our customers knew that two hot, dry growing seasons in a row have limited the supply of SW with lower protein levels. They were concerned about how the higher protein SW would perform. USW responded with trade service and technical support that reassured customers.

The key was demonstrating that solvent retention capacity (SRC) analysis is the best way to evaluate flour performance and that even higher protein SW meets expected standards without increasing costs. USW is reinforcing this approach during technical service visits and education for flour mills and processing facilities throughout the South Asian region. For example, USW recently conducted a soft wheat flour products training session for sales and quality managers at a mill operated by one of the 20Rediscover RediscoverWH WH | January 2016 20 E EATAT| January 2016

region’s largest milling groups, which built on prior training sessions earlier in 2015 at the mill and at a regional training center in a prior year.

Price risk continues to be a concern Tarik Gahi, USW Milling and Baking Technologist for these customers, but serving the Middle East, East and North Africa, was one USW quickly of several speakers reviewing 2015/16 U.S. wheat crop quality at a recent seminar in Cairo, Egypt. Hundreds of addresses customers and friends participated in more than 26 crop individual quality meetings this year. issues. USW this year helped quality information about the another mill’s procurement 2015/16 U.S. crop at USW’s annual managers understand how contract series of Crop Quality Seminars. specifications, FGIS shipping log By the end of November, USW data and other purchasing aspects had shared current data on add value to U.S. wheat purchases. grade factors, flour extraction Now, several major customers rates, dough stability, baking loaf have more knowledge and volume, noodle color and texture, tools to consider the ingredient and more for all six U.S. wheat options they need to serve classes, to hundreds of buyers, their downstream customers. millers and processors in more This same level of service and than more than 30 countries. We technical assistance is available want to thank our guests who for all customers and those attended 26 separate seminars, organizations that are interested including our first crop quality in learning more about how to seminar conducted over the put U.S. wheat to work. For more Internet, and customers who information, contact your local welcomed us to their places of USW representative. business.

USW Shares Crop Quality Data at Annual Seminars After weeks of preparation to analyze thousands of samples and publish the results in USW’s 2015 Crop Quality Report, professional staff from USW, state commissions and educational partner organizations shared

Legacy organizations to USW first identified the need to quickly gather and share new crop data in 1960. Since then, wheat producers and the U.S. government have provided the funding used to test, analyze and publish a complete picture of each year’s crop. Given this commitment to transparency, you can be confident

in the data, which, together in consultation with your local USW representative, you can use to get the most value possible from this year’s abundant, high-quality supply.

For more information about current U.S. wheat crop quality, visit our website to see the 2015 Crop Quality Report as well as more detailed reports on each class, published in English, Spanish, French and Arabic, with Mandarin versions available soon.

History Lessons for TPP Ratification

By Dalton Henry, USW Director of Policy As details of the Trans-Pacific Partnership (TPP) continue to garner headlines, there is a lot of speculation about when Congress will consider the agreement. A delay would be very costly and the proof of that is found in the recent history of U.S. free trade agreements. It is worth looking back in recent history to just how costly delays in trade agreements can be.

Nine years ago, on the day before the Thanksgiving holiday the U.S. and Colombia finished negotiations on a free trade agreement that promised lower wheat costs for Colombian millers and greater market access for U.S. wheat producers. The United States dragged its feet on implementing the agreement for nearly six years amid tepid congressional support and the election of a new administration that insisted on renegotiating certain new provisions.

During that delay, Colombia moved to secure agreements with other countries, most notably Canada. With faster approval by the Canadian government, the Canada-Colombia Free Trade Agreement went into effect nine months ahead of the U.S. agreement. It allowed duty free access to Canadian wheat supplies, which in turn put U.S. wheat at a disadvantage. As U.S. wheat growers waited for the U.S. government to act on our FTA, U.S. wheat market share in Colombia plummeted to 27 percent in 2011/12, from the previous three-year average of 55 percent.

A delay in the consideration and approval of the TPP could have similar far-reaching effects for the U.S. wheat industry. Vietnam is a rapidly growing wheat market for quality U.S. supplies, with imports from the U.S. steadily rising over the last decade. The dark side of this comparison lies in the enactment of the recently completed ASEAN-Australia free trade agreement, which gives Vietnamese millers dutyfree access to Australian wheat after Jan. 1, 2016. Without equal tariff treatment that would come with TPP’s implementation, U.S. supplies will suffer a $12 to $15 per metric ton (MT) disadvantage.

That would likely negate for a time much of the technical and trade service work USW has invested in Vietnam and potentially blocking more than 600,000 MT of U.S. wheat over the next two years from customers who want to import it.

The current timeline scenarios for TPP consideration are troubling. The agreement is a third of the way through a

congressionally mandated 90-day public review period. The U.S. International Trade Commission is formally evaluating the agreement in a review expected to last until mid-May 2016. That means congressional consideration would likely not start before mid-2016.

Many commentators believe that timeline would put consideration too close to the fall 2016 U.S. elections, giving political cover for those who insist the agreement will have to wait until late 2016.

Even more concerning would be a delay demanded by opponents to hold off consideration until a new administration takes office and the next Congress is seated.

We believe the old saying that those who fail to study history are doomed to repeat it applies to our concern about the future of the TPP agreement. Any of these delays will cost U.S. growers and their customers dearly, and that is something worth remembering.

Wheat Industry News Scientists Agree Pasta is a Healthy Food. During World Pasta Congress in October, an international committee of scientists and food authorities released a Scientific Consensus Statement concluding that, contrary to fad diet thinking, pasta represents a healthy, complex carbohydrate-containing food suitable to most diets. For the first time since the original Consensus Statement in 2004, scientists addressed topics including gluten-free trends, sports nutrition and sustainability.

Read the full announcement and consensus statement at http:// www.internationalpasta.org/index. aspx?news=6031.

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Germany Steps Up Its Wheat Sequencing Effort. The German Federal Ministry of Food and Agriculture announced Dec. 2 that it would award 1.5 million Euros to a project aimed at providing a reference sequence for two wheat chromosomes, part of the international effort to decipher the bread wheat genome, led by the International Wheat Genome Sequencing Consortium (IWGSC). Read the full announcement at http://www. wheatgenome.org/News/Pressreleases/Germany-Steps-Up-ItsWheat-Sequencing-Effort.

University of Minnesota Professors, Students Developing 'Next Generation of Crops'.

Researchers at the University of Minnesota are working on a wheat that you do not have to replant, and you could find it in stores soon. Perennial crops are convenient because farmers do not have to re-plant them year after year, and now perennial wheat grass could be the future.

Read the full story and watch the video report at http://www.kaaltv. com/article/stories/S3978896. shtml.

CIMMYT Scientist Ravi Singh Receives Honor for Wheat Genetics, Breeding. The American Association for the Advancement of Science (AAAS) named Singh a Fellow of the organization for his “distinguished contributions to the field of agricultural research and development, particularly in wheat genetics, pathology and breeding.” Singh’s research has shown that globally effective, durable resistance to leaf, yellow and stem rust fungi in wheat involves interactions of slow rusting genes that have additive effects and that the accumulation 22Rediscover RediscoverWH WHE AT | January 2016 22 E AT | January 2016

of four or five of these genes results in a level of resistance comparable to immunity.

Read the full announcement at http://www.seedquest.com/ news.php?type=news&id_ article=70955.

Evogene Officially Opens Research and Development Facility in St. Louis, MO. Evogene Ltd., a leading company for the improvement of crop productivity and economics for the food and feed industries, recently opened a new Research and Development facility in St. Louis. The company collaborates with world-leading agricultural companies to develop improved seed traits in relation to yield and abiotic stress (such as tolerance to drought), and biotic stress (such as resistance to disease and nematodes), in wheat and other key crops.

Evogene also focuses on the research and development of new products for crop protection, such as weed control. Read the full announcement at http://www. evogene.com/News-Events/News.

Asian Noodle Technology and Ingredient Application Course.

This hands-on course at the Wheat Marketing Center focuses on improving noodle quality by optimizing flour and functional ingredients. The dates for the next course in 2016 are still to be determined, but those interested can learn more at www.wmcinc. org.

December 17, 2015 A Deeper Look at Who is Holding the Record World Wheat Supply

By Stephanie Bryant-Erdmann, USW Market Analyst

Increases in yields and harvested acres pushed the world wheat supply—beginning stocks and production—to a record 947 million metric tons (MMT) in 2015/16, according to USDA’s December World Agricultural Supply and Demand Estimate. The 3 percent, or 27.9 MMT, growth from 2014/15 levels is roughly equal to Canada’s annual wheat production, essentially adding an entire country’s supply to the global market.

In 2015/16, the world’s top five wheat exporters—the United States, European Union (EU), Canada, Australia and Russia—produced 328 MMT of wheat, just 1 percent more than 2014/15. However, they carried in 12 percent more stocks for a total supply of 379 MMT or 40 percent of global wheat supplies.

The United States and EU began the marketing year with 28 and 36 percent larger beginning stocks, respectively, which, despite production levels similar to 2014/15, pushed total wheat supplies to 76.3 MMT and 158 MMT. Similarly, Russia carried in stocks of 6.28 MMT or 21 percent more than 2014/15, though unlike the United States and EU, Russia produced its largest wheat crop in four years. USDA believes Russia produced 60.5 MMT of wheat for 2015/16, 22 percent more than the five-year average.

Canada is the only top exporting country to produce less wheat in 2015/16 than the year prior. USDA forecast Canadian production at 27.6 MMT, down 6 percent from 2014/15. With beginning stocks of 7.11 MMT, which is 32 percent less than 2014/15 levels, Canadian supply dropped to 34.7 MMT, the lowest level since 2012/13.

Australia beginning stocks were 27 percent less than the five-year average at 4.27 MMT, but USDA expects Australian farmers will harvest 26 MMT, or 10 percent more wheat than in 2014/15.

Australia’s harvest will be 80 percent complete by Dec. 31, according to Reuters.

These top five wheat-exporting countries account for on average 81 percent of global wheat exports, while holding 41 percent of the world supply. In contrast, China and India hold a combined 33 percent of global wheat supply but should account for only 2 percent of global wheat exports in 2015/16 by USDA estimates.

China has a huge impact on global wheat supplies. In 2015/16, more than 204 MMT of wheat from beginning stocks and production is located in China.

That accounts for almost half of the global supply increase in 2015/16. Yet little of this wheat will enter the global wheat market. In an effort to ensure food security for its 1.37 billion population, China maintains national grain reserves of staple crops including wheat, reflected in the ending stocks values. By USDA’s estimate, China’s 2015/16 ending stocks will total 87.1 MMT, accounting for 38 percent of expected global wheat ending stocks.

USDA predicts India’s wheat exports will fall to 800,000 metric tons (MT) in 2015/16, down from 3.40 MMT in 2014/15, due to decreases in production and beginning stocks. In 2015/16, India’s production and beginning stocks account for 11 percent of global wheat supply, despite an estimated 7 percent fall from

2014/15 to 106 MMT, the lowest level since 2011/12. India wheat imports will grow from 52,000 MT in 2014/15 to 500,000 MT in 2015/16, by USDA estimates.

While Southern Hemisphere farmers are still harvesting the final piece of the 2015/16 supply puzzle, Argentina’s 2015/16 wheat supply estimated at 13.7 MMT may become more accessible to the world markets after Argentine President Mauricio Macri eliminated export taxes on wheat Dec. 14. Prior to the export tax elimination, USDA forecast Argentine wheat exports at 6.0 MMT, up 9 percent from 2014/15, but still 11 percent behind the five-year average. As of Dec. 10, harvest is 41 percent complete, behind the 2014/15 pace of 53 percent on the same date due to rain delays, according to Bolsa de Cereales, the Argentine Grain Exchange.

The rain delaying harvest in Argentina and Brazil affected Brazil’s crop more severely. One Brazilian farmer said about his wheat crop this year, “There should be a warning system in years when it is not worth planting wheat. This year I should not have planted (wheat), because of El Niño." Brazil began the year with a 54 percent reduction in beginning stocks, according to USDA. On Dec. 9, Brazil’s Secretary of State for Agriculture and Supply estimated production in Paraná and Rio Grande do Sul at 4.9 MMT, 18 percent lower than 2014/15, due to poor growing conditions and excessive rains at harvest that also downgraded in quality. USDA forecasts Brazil domestic consumption at 10.6 MMT.

While global wheat supply is getting the lion’s share of attention, it is important to note the changes in demand. Globally, domestic consumption of wheat has increased an average 2 percent each year, and USDA estimates it will reach a record 715 MMT in 2015/16. Consumption growth in the top five markets for U.S. wheat—the Philippines, Mexico, Japan, Nigeria and Korea—has averaged a 3 percent increase each year since 2005.

WTO Doha Development Agenda on Ropes in Nairobi

By Ben Conner, USW Deputy Director of Policy Every two years, the World Trade Organization (WTO) holds a ministerial conference with lead trade officials from every WTO member. Nairobi, Kenya, hosted the tenth ministerial conference (MC10) since the WTO was founded. MC10 is also the sixth ministerial conference since the Doha Development Agenda (DDA) was launched in 2001.

Sadly, prospects for reaching a comprehensive DDA agreement have never looked bleaker than they do now.

The DDA held a great deal of promise to improve market access and growth for the world’s exporters and importers. The U.S. wheat industry was a strong champion of the early negotiations as a forum to liberalize trade across the world by lowering costs for importing consumers and removing trade barriers for exporters. However, that potential has largely been lost as countries entrenched themselves into opposing positions.

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In hindsight, the roots of the DDA conflict are now apparent in its name. There is evidence that development typically occurs when countries are open to trade and minimize government intervention in the marketplace. Many developing countries understand this and want the WTO to be a productive institution that deepens trade ties, but for others, even the current WTO rules are too much.

To them, “development” seems to mean being able to trade as little as possible and subsidize production as much as possible, without any concern for WTO disciplines.

Yet, those disciplines are there to keep policies in one country from negatively affecting farmers, workers, and businesses in other countries. That is true whether those countries are developed, developing or among the least developed countries. For example, China and India consider themselves to be developing, but respectively produce 18 percent and 14 percent of the entire world wheat supply. Any policies affecting wheat in those countries will move markets all the way back to farm gates in the United States. Turkey also considers itself to be developing but subsidizes its flour milling industry to the point that Turkish flour displaces both imported wheat and milled flour in other, mostly developing, countries.

The DDA was meant to set the rules for increased trade to promote development. With agreements requiring more than 160 members to reach a consensus and certain members holding intractably opposed views on the direction of the WTO, a 24Rediscover RediscoverWH WH E AT| January | January 2016 24 E AT 2016

comprehensive agreement seems impossible. Many members are concerned about the possibility for a smaller agreement that would actually weaken agricultural disciplines, which happened at the 2013 MC9 in Bali, Indonesia.

The big question going forward is what will happen to the Doha Round. The fact is many countries are not waiting. Negotiations on bilateral and regional trade agreements have accelerated over the past decade. At the WTO makes progress only in sector- and issue-specific trade agreements. The pattern of subsidies has changed; economic power has changed; technology has changed. The world has left the DDA behind.

As U.S. Trade Representative Michael Froman recently said, “what cannot be achieved in Nairobi will not be achieved by trying again with the same failed approach.”

At the time of this writing, we do not know what will happen in Nairobi, but we hope for the sake of development and market opportunities for U.S. farmers and their customers that WTO disciplines are not weakened and trade negotiations will not continue with a 2001 agenda in a 2016 world.

Freight Rates Plunge with Too Many Ships, Not Enough Cargo

By Jay O’Neil, O’Neil Commodity Consulting, Senior Agricultural Economist, IGP International International grain buyers have been asking me two questions recently: what is going on with ocean freight markets, and how long will this last?

The initial question is easier to answer than the second one.

Global ocean freight markets are experiencing one of the biggest financial down turns in history.

The Baltic Dry-Bulk Index has sunk to historic lows and physical cargo rates are the lowest they have been in many years. Drybulk Panamax ocean freight rates from the U.S. Gulf to China are currently about $23.50 per MT as of Dec. 10. We have not seen rates this low since the last historic rate crash of December 2008. Then, it was for a brief period. Now, the down turn will likely last longer and the recovery will be slower.

The basic reason for this market situation is quite simple: the world dry-bulk fleet is considerably bigger than global cargo demand.

I would estimate that we currently have a dry-bulk fleet that possesses at least 15 percent more cargo carrying capacity than cargo demand.

So how did we get to this point? To answer that question we have to go back to 2006 to 2007. It was during this period that China ramped up its aggressive economic expansion and massive domestic building programs. World markets for iron ore, coal and steel, which constitute almost two-thirds of dry-bulk freight demand, along with other building materials, failed to anticipate this rush of new demand; the freight market and world fleet were not ready for it, either. Rates for grains and oilseeds, which represent only 11 percent to 14 percent of demand, went straight up in the air with rates for dry-bulk commodities.

By the middle of 2007, drybulk shipping markets and vessel

owners realized that the global fleet would have to expand to meet the new, growing Chinese demand. Prevailing market economics strongly encouraged this effort: every vessel owner with one ship wanted two, every owner with 10 ships wanted 20.

A year later, freight markets had reached all-time highs and the building boom was in full swing.

The global outlook on freight demand appeared glorious. Vessel owners subscribed to the theory that cargo demand (particularly from China) would continue to rise for many years, and that substantial additional cargo carrying capacity was needed and financially viable.

The global economic picture has stymied a market turn around. The Chinese economy continues to grow but at just 6.5 percent annually rather than at its previous 10 percent pace. The European economy has yet to exit from its economic down turn and the U.S. economy is growing at a low 2.5 percent to 2.8 percent rate.

However, like many things in life, nothing lasts forever. The 45-degree upward trend line on vessel owners’ cargo demand charts did not stretch out as far as the market thought it would.

The end of the 2008 Summer Olympic Games in Beijing signaled the start of a decline in freight demand. The global economic recession hit in 2009.

Yet construction of new vessels did not even slow down. With new build orders for vessels in place, the ships were delivered over the next four to five years, planting the seeds of today’s market conditions.

It will likely take another year or two for things to improve sufficiently to soak up the excess vessel capacity. It is my estimate that dry-bulk freight markets are currently bottoming out and will bump along at relatively low levels until we see a true global economic recovery. So world grain buyers should enjoy relatively low freight rates for the near future, while diligently selecting the most financially stable freight suppliers.

Writers for ocean freight publications and many consultants originally projected that dry-bulk rates would begin to increase in late 2013; then it was to be 2014 and then 2015. Each period, they moved the recovery arrow forward by six months. So far, these projections proved to be nothing more than wishful thinking.

Vessel owners and their lenders will continue to experience very rough seas. In 2016, there will be defaults, industry consolidation and freight suppliers that simply go out of business; the outlook for the containerized shipping industry is not really any better.

Wheat Industry News Cereal Science Events Calendar.

Dr. M. Hikmet Boyacioglu continues to update and share this monthly calendar of events.

Download the December 2015 calendar here. You may send an email to Dr. Boyacioglu to receive the events calendar at hikmet. boyacioglu@okan.edu.tr

extracted from wheat kernels that will help millers meet baking industry standards and consumers' expectations. Read the full story at http://www.science20. com/news_articles/researchers_ develop_method_for_higher_ purity_in_wheat_flour-161106.

Asian Noodle Technology and Ingredient Application Course.

This hands-on course at the Wheat Marketing Center focuses on improving noodle quality by optimizing flour and functional ingredients. The dates for the next course in 2016 are still to be determined, but those interested can learn more at www.wmcinc. org.

IGP-KSU Grain Purchasing Short Course. Scheduled for Apr. 4 to 15, 2016, this course will focus on the mechanics of purchasing raw materials and features detailed discussions of cash and futures markets, financing and ocean transportation. Registration will close on Apr. 4, 2015. Visit http://www.igpevents.grains.ksu. edu/Detail.aspx?enc=mXCYNjS VdPBTKZoBDM Zd8tf4y8x560lX ueX42WVhFCtIDKDSmrpO yGoItEXRfgrTBELZJBcWnd Id5fUrO3J1duGpBv+ ctFFIftYv/ KpVtYU= to register and for more information.

Researchers Develop Method for Higher Purity in Wheat Flour. Kansas State University researchers have developed a new testing method that focuses on high endosperm purity in flour Rediscover E AT 2016 RediscoverWH WH E AT| January | January 201625 25

Whole Wheat Chocolate Peppermint Drop Cookies Ingredients

½ cup butter, melted 1 cup brown sugar ¾ teaspoon baking powder ½ teaspoon salt 2 large eggs 2 teaspoons vanilla extract 2/3 cup Dutch-process cocoa 1 ¾ cups white whole wheat flour 1 cup dark chocolate chips ½ cup white chocolate chips ½ cup crushed peppermint candy 36 whole peppermint candy melts (Wilton), optional

Directions 1. Preheat oven to 350°F. Lightly grease or line with parchment paper two cookie sheets.

4. Drop dough by tablespoonfuls onto the prepared cookie sheets, leaving 1 ½-inch between them.

2. In medium bowl, mix together melted butter, brown sugar, baking powder and salt. Add the eggs and vanilla, beating until smooth.

5. Bake 8 to 10 minutes, until cookies are set. Remove from oven. If desired, place a whole peppermint candy in center of each cookie. Note: cookies will be very soft coming out of the oven, but will firm up as they cool on the cookie sheet.

3. Stir in the cocoa and flour; the dough will be sticky. Mix in the chocolate chips and crushed peppermint candy.

26

Rediscover WHE AT | January 2016

Nutrition Information

One cookie provides approximately 136 calories; 2 g protein; 20 g carbohydrate; 2 g dietary fiber; 6 g fat (3g saturated); 18 mg cholesterol; 7 mcg folate; 3 mg iron and 84 mg sodium.

Makes about 3 dozen cookies.

Prep Time: 10 minutes Bake Time: 8-10 minutes

Maltby Market Analysis

Hello Kansas Wheat. Happy New Year 2016. Let’s hope this year…

by Dan Maltby

Hope isn’t much of a strategy, unfortunately, but there are no real supply shocks on the immediate horizon. We do not know how this spring will develop in the USA Corn Belt, although droughts leading to massive production cuts in The States aren’t very common. The far right column is my best guess of what the 2016/17 crop year might bring, with a 170 bu/ac national average yield, and importantly, no major corn acreage reduction. Certainly a 10 million acre cut would drastically alter this outlook, but I doubt that is going to happen.

CORN USA year planted harvested yield production supply exports total use carryout stox/use USA $ farm price

2006/07 78.3 70.6 149.1 10,531 12,510 2,125 11,207 1,304 11.6% $3.04

2007/08 93.5 86.5 150.7 13,038 14,362 2,437 12,737 1,624 12.8% $4.20

2008/09 86.0 78.6 153.9 12,092 13,729 1,849 12,056 1,673 13.9% $4.06

2009/10 86.4 79.5 164.7 13,092 14,774 1,980 13,066 1,708 13.1% $3.55

2010/11 88.2 81.4 152.8 12,447 14,182 1,834 13,055 1,128 8.6% $5.18

2011/12 91.9 84.0 147.2 12,360 13,516 1,543 12,527 989 7.9% $6.22

2012/13 97.3 87.4 123.1 10,759 11,932 731 11,111 821 7.4% $6.89

2013/14 95.4 87.5 158.1 13,829 14,686 1,920 13,454 1,232 9.2% $4.46

2014/15 90.6 83.1 171.1 14,216 15,479 1,864 13,748 1,731 12.6% $3.70

12/9/2015

2015/16 88.4 80.7 169.3 13,654 15,415 1,750 13,630 1,785 13.1% $3.65

?

2016/17 86.0 79.0 170.0 13,430 15,245 1,775 13,655 1,590 11.6% $3.75

A USA Corn Belt drought happens about once in 10 years, so it’s possible, but not likely.

Ethanol usage will remain steady, and so will domestic feeding. The major corn demand variable is exports. How likely is it USA corn exports get back above 2 billion bushels?

USA ALL CORN EXPORTS year 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 corn exports 1818 2134 2125 2437 1849 1980 1834 1543 730 1920 1864 1750

With current Chinese ending corn stocks projected to be huge at 114 million tonnes, I don’t think the USA will see a massive uptick in corn exports this calendar year either.

Charts and discussions follow, with the goal of giving you useful information to help you with your business. My disclaimer remains the same: these are my sometimes rapidly changing opinions; the markets are quite treacherous; and past performance is no guarantee…dm

Kansas Wheat market update #202 danmaltby.riskmgmt@gmail.com 01/01/16pg. 1

Rediscover WHE AT | January 2016 27

The dormant winter wheat in The Plains is in pretty good shape, so the most likely scenario for this calendar year is…continued low wheat prices for quite a while. Possibly Ukraine’s wheat crop is in trouble, but this chart of world wheat ending stocks divided by total usage suggests even if Ukraine has some issues, to drop this ratio below 25%, it will take a problem in Europe and probably India as well.

The next USDA WASDE update will be in little over a week, on Jan 12, but I wouldn’t expect to see any wildly bullish changes coming. Also on that day, the NASS branch of the USDA will issue 2 key reports: Grain Stocks in All Positions, and Winter Wheat Seedings.

You know how many acres you planted this fall. Were they much different than last year> Were they much different than “average”? My opinion, and we will soon see, is USA HRW winter wheat acres DID NOT CHANGE MUCH. I know some hope they are down a lot…, but I doubt that is reality.

PLANTED WINTER WHEAT ACRES (1000 ac) 9/30/2015 11 year 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 average KS 10,000 9,800 10,400 9,600 9,300 8,400 8,800 9,400 9,500 9,600 9,200 9,455 CO 2,550 2,150 2,500 2,150 2,600 2,450 2,300 2,350 2,300 2,750 2,400 2,409 NE 1,850 1,800 2,050 1,750 1,700 1,600 1,520 1,380 1,470 1,550 1,490 1,651 OK 5,700 5,700 5,900 5,600 5,700 5,300 5,100 5,400 5,600 5,300 5,300 5,509 TX 5,500 5,550 6,200 5,800 6,400 5,700 5,300 5,700 6,200 6,000 6,000 5,850 SD 1,550 1,450 2,100 2,050 1,700 1,350 1,650 1,320 1,300 1,210 1,420 1,555 ND 310 200 465 630 580 330 400 750 215 870 200 450 MT 2,150 1,950 2,240 2,600 2,550 2,050 2,250 2,300 2,000 2,500 2,350 2,267 CA 495 450 500 680 615 660 620 610 610 460 400 555 total 30,105 29,050 32,355 30,860 31,145 27,840 27,940 29,210 29,195 30,240 28,760 29,700

Crop year 2010/11 planted HRW acres were the lowest in the 11 years shown in the table, and were about a million acres lower than 2015/16.

IF acres drop to that level, maybe the USA loses 40 million bushels of production, or 1.1 million tonnes.

As 2015/16 world wheat ending stocks are projected to be about 717 million tonnes, a million tonne drop will not make much difference.

Anyways…my point is “fundamentals” show the world has no current corn or wheat shortages, and it will take major problems in more than one location to significantly alter the fundamental outlook.

I assume that is why recent Commitment of Traders from the CFTC show the “funds” are short.

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Rediscover WHE AT | January 2016

Let’s take a look at the weekly closing futures price table: CLOSE

KWH16

KWN16

KWZ16

CH16

CN16

CZ16

WH16

MWH16

MWN16

SF16

01/01

$4.69

$4.89

$5.24

$3.59

$3.71

$3.83

$4.70

$4.93

$5.13

$8.71

12/25

$4.68

$5.88

$5.21

$3.65

$3.77

$3.89

$4.68

$4.95

$5.15

$8.75

12/18

$4.82

$5.03

$5.35

$3.75

$3.86

$3.97

$4.87

$5.06

$5.26

$8.92

12/11

$4.83

$5.03

$5.35

$3.75

$3.85

$3.96

$4.91

$5.08

$5.27

$8.71

12/04

$4.81

$5.02

$5.34

$3.82

$3.93

$4.03

$4.85

$5.16

$5.32

$9.06

11/27

$4.67

$4.88

$5.22

$3.67

$3.79

$3.90

$4.79

$5.07

$5.24

$8.73

11/20

$4.71

$4.92

$5.24

$3.70

$3.81

$3.91

$4.90

$5.09

$5.27

$8.58

11/13

$4.80

$5.00

$5.31

$3.66

$3.77

$3.88

$4.98

$5.09

$5.31

$8.55

11/06

$5.06

$5.27

$5.59

$3.82

$3.94

$4.02

$5.26

$5.28

$5.46

$8.67

10/30

$5.10

$5.30

$5.59

$3.92

$4.02

$4.08

$5.26

$5.36

$5.54

$8.86

10/23

$4.91

$5.11

$5.41

$3.89

$3.99

$4.03

$4.97

$5.22

$5.44

$8.96

10/16

$4.99

$5.19

$5.49

$3.88

$3.99

$4.05

$5.00

$5.26

$5.46

$9.02

New sell signals in corn, and Minneapolis wheat, and Chicago and KC wheat only 2c away from new sell signals on a close down there this Friday. Momentum traders (trend followers) are short.

Buy-stops in KC wheat are about 40c higher. Chgo wheat buy-stops are 56c away! Wowzers…and new selling would be expected on new weekly closing lows in wheat and corn. This table will switch to March beans next week, but new bean selling is probably only 15c or so away.

If I ran a fund, and looked at this table, I’d be thinking “stay short”. Here’s a KC March wheat chart. It looks like about every other grain futures chart…flat out horrible. That red line support is suspect.

Kansas Wheat market update #202 danmaltby.riskmgmt@gmail.com 01/01/16pg. 3

Rediscover WHE AT | January 2016 29

Cash wheat bids remain low, although we do see some basis strength (I think…as these holiday bids might be off):

Date 01/01 12/18 12/11 12/04 11/27 01/02 Date 01/01 12/18 12/11 12/04 11/27 01/02 BASIS 01/01 12/18 12/11 12/04 11/27 01/02 Date 01/01 12/18 12/11 12/04 11/27 01/02

Dodge $4.12 $4.12 $4.13 $4.11 $3.90 $5.77 Concordia $4.32 $4.32 $4.33 $4.26 $4.12 $5.82 Dodge -67 -70 -70 -70 -60 -40 Concordia -47 -50 -50 -55 -38 -35

Colby $4.22 $4.22 $4.21 $4.19 $4.00 $5.79 Salina $4.37-$4.42 $4.37-$4.42 $4.38-$4.43 $4.36-$4.41 $4.27-$4.32 $5.92-$5.97 Colby -57 -60 -62 -62 -50 -38 Salina -42, -37 -45, -40 -45, -40 -45, -40 -23, -18 -25, -20

Goodland $4.24 $4.24 $4.18 $4.16 $3.92 $5.81 Hutchinson $4.20-$4.47 $4.20-$4.47 $4.21-$4.48 $4.19-$4.46 $4.04-$4.32 $5.89-$6.07 Goodland -55 -58 -65 -65 -58 -36 Hutchinson -59, -32 -62, -35 -62, -35 -62, -35 -46, -18 -28, -10

Protection $4.22 $4.22 $4.18 $4.16 $3.95 $5.77 Wichita $4.28-$4.47 $4.28-$4.47 $4.29-$4.48 $4.27-$4.46 $4.14-$4.27 $5.93-$6.07 Protection -57 -60 -65 -65 -55 -40 Wichita -51, -32 -54, -35 -54, -35 -54, -35 -36, -23 -24, -10

Scott City $4.13 $4.13 $4.13 $4.04 $3.83 $5.79 Ark City $4.24 $4.24 $4.25 $4.17 $4.08 $5.91 Scott City -66 -69 -70 -77 -67 -38 Ark City -55 -58 -58 -64 -42 -26

Sublette $4.12-$4.22 $4.12-$4.22 $4.13-$4.23 $4.11 $3.90-$3.92 $5.74-$5.82

Sublette -67, -57 -70, -60 -70, -60 -70 -60, -58 -43, -35

The last line shows cash bids from 1/2/15, one year ago. Omega. Wheat bids dropped more than $1.50/bushel this year. A weaker basis is noticeable. Empty rail cars are cheaper this year, but clearly this market reflects the puny HRW export situation. year exports

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 393 349 308 510 389 428 280 536 447 370 616 397 380 449 269 225

The 225 million bushel USA HRW export projection for this year is a modern era low.

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Rediscover WHE AT | January 2016

I think Brazil will step in for USA HRW imports relatively soon, and that should support the basis. It’s hard to see it getting worse.

And even though the trend is down, and the charts look bad, long term…I admit I have a hard time seeing an aggressive push below $4.50. Yuk.

A year or so ago I gave a speech which focused on alternative crops. Milo prices are in the tank right now too…and about the best alternative crop potential seemed like organic wheat. Recently, I saw that Ardent Mills will make a push to double USA organic wheat acreage. I’m not sure what that will do to organic wheat prices, but I doubt the organic premium will crash any time soon as converting to organic farming is a long process.

Here is a link to an article in which Ardent’s Shrene White states organic supply is not keeping up with demand. She also states they started talking about this last spring; I remember she attended that speech I gave… http://www.foodnavigator-usa.com/content/view/print/1199954 Anyways…converting your farm to organic production would not be easy, nor would it happen overnight, but it’s not like Ardent Mills is some fly-by-night organization with a mobile phone, a semitrailer and a portable auger.

2015 was a rough year. I’m glad it’s over. Prices are much nearer the bottom than they were a year ago.

Opportunities will return. The Russian drought of 2010 showed us prices can turn on a dime, and when that next supply shock comes, it will be a wild ride. The goal is to stay in business until it comes. Watch your cash flow. Invest when it’s a good fit for your personal operation, but don’t make the mistake thinking a big rally has to happen anytime soon. “Soon” is the key word.

Maltby Market Analysis is provided weekly to members of the Kansas Association of Wheat Growers via email. To become a KAWG member and subscribe, please contact Jordan Hildebrand at jhildebrand@ kswheat.com.

Kansas Wheat market update #202 danmaltby.riskmgmt@gmail.com 01/01/16pg. 5

Rediscover WHE AT | January 2016 31

Upcoming Events FEBRUARY 2016 • Wheat Industry Winter Conference, February 2, 2016 • Women Managing the Farm, February 4, 2016 to February 5, 2016 • Kansas Commodity Classic, Hilton Garden Inn, Manhattan, Kansas, February 11, 2016 • WQC 2016 Annual Meeting, February 16, 2016 to February 18, 2016

MARCH 2016 • NAWG Annual Meeting and 2016 Commodity Classic, New Orleans, LA, March 3 to March 6, 2016.