Rediscover Wheat - July 2016

TM

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

JULY 2016

INSIDE THIS ISSUE

Engineering resistance to beat the bugs Wheat as we grow it Wheat buyers conference positions U.S. wheat as an exceptional value

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In This Issue :

TM

Volume 3 • Number 7 www.rediscoverwheat.org The official publication of

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

KAWG MEMBERSHIP

EDITOR

ASSISTANT EDITOR/DESIGNER

$100 per year

Marsha Boswell • mboswell@kswheat.com

Malerie Strahm • commintern@kswheat.com

CONTRIBUTORS

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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Engineering resistance to beat the bugs Wheat as we grow it IGP Stakeholders News Brief News from the National Association of Wheat Growers Recipe: Bierocks News from U.S. Wheat Associates Maltby Market Analysis Upcoming Events

Engineering Resistance to Beat the Bugs

by Malerie Strahm

U

ntil now, resistance to the aphid-vectored virus known as barley yellow dwarf (BYD) has been limited, at best, in wheat. This serious wheat disease in Kansas has had reports of yield losses of up to 35 percent. Suggested risk management practices such as adjusted planting dates and using insecticides are effective in the short-run, but not enough to control the disease as a whole.

What if there was a way to beat this disease, once and for all?

Research lead by scientist Bernd Friebe at Kansas State University and the Wheat Genetics Resource Center I/UCRC may provide a way to control BYD through fabricated genetic resistance. The objective of his current research project is to identify naturally-occurring sources for BYD resistance and transfer them into adapted Kansas winter wheat cultivars. The use of cultivars with genetic resistance to the virus or the aphid vector is the most economic and practical way of controlling BYD. “For the environment, it’s always the best solution if you can use native resistance,” said Friebe.

To encounter resistance, Friebe and his team start with evaluating chromosomes from wild relatives of wheat for agronomically-interesting traits and then combining modern wheat with wild wheat to produce recombinants that can be used directly in wheat improvement. A recombinant with a resistant gene to wheat streak mosaic virus, Wsm3, was derived from a wild wheat species called Thinopyrum intermedium.

This recombinant also contains resistance to Triticum mosaic virus and has the potential of also containing resistance to BYD. Finding these recombinants, however, is time-intensive.

“If you already have chromosome addition lines, it can take three to four years to find recombinants with shortened chromosome segments. If you start from scratch by crossing wild relatives to wheat then it might take ten years to produce recombinants having the trait of interest,” said Friebe.

This gene transfer process is not a simple task and the talent to apply the technique is rare. Manipulation under a microscope can be extremely difficult and time consuming, resulting in fewer people getting into the field. Friebe, and his team of scientists including Dal-Hoe Koo and Tatiana Danilova, are among a handful of people worldwide who are able to do this chromosome engineering. Resistant genes are invaluable, but perhaps more so are the dedicated scientists who can artfully extract that value.

Value, in the end, will be added back to farmers who can use the resistant wheat in their fields, eliminating the need to unsuccessfully control aphid populations or time their planting just right. The future for BYD may be bleak, but the future for farmers is bright.

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Wheat as We Grow It

by Malerie Strahm

From the way it is grown, harvested and processed into flour, and the way it’s entwined in the lives of the families who produce it, wheat’s journey is an emotional one. In a time where agricultural practices are questioned at every turn, it’s important to look at what’s being done to keep our food safe while conserving the environment while providing enough food for the earth’s inhabitants. Farming also is not a job that can be clocked out of at 5:00 p.m. every day, and sometimes it requires all hands on deck. It’s a family business and a way of life.

No residues, no-till, no worries A common misconception among consumers is that their food supply is tainted by chemicals applied to crops to control weeds and pests and is unsafe to eat. This simply isn’t true. In fact, for a farmer, applying herbicides and pesticides to crops is much like applying Miracle Grow fertilizer to your backyard garden. Just as you would 4

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wash your home-grown vegetables before eating them, measures are taken to make sure none of the chemicals spread on wheat fields end up on your table.

To make sure chemicals don’t linger on the wheat taken to the elevator, a period of time has to be allowed before starting harvest.

“There are intervals you have to wait before you can harvest. In the case of the fungicide I used, you can’t harvest until 30 days have passed. In my case it’s been more like 45 so there’s really no residues left at this point,” said Michael Jordan, a Kansas wheat farmer from Mitchell County during the 2016 wheat harvest. “It runs down pretty quickly and really only lasts about two weeks. 30 days is a pad for safety purposes.”

In addition to keeping fields free of harmful pests, farmers adopt agronomic practices to conserve the soil.

“I’m a no-till farmer. This particular field has not be tilled since 1999. You’re looking at 16 years of accumulated mulch from the crops that I’ve grown. Mulch laying on the soil keeps it cooler, helps prevent wind erosion and holds moisture,” said Jordan.

A family affair Cultivating the land and harvesting a crop takes long hours and several helping hands. Wheat harvest time is especially busy because, once the wheat turns dry, it’s a rush to get the grain in before it rains again.

“Our daughter and son-in-law came back about a year and a half ago to the operation,” said Dean Stoskopf of Barton County. “I’ve had a hired man that’s worked for me for 23 years now and he’s had one son that’s worked for me parttime during the summer and then right now his two younger sons are helping. At times there’s four from his family that are working for us during harvest time.”

To watch videos of harvest, visit youtube.com/kansaswheat Harvest brings families together and it’s what children remember for generations to come.

“Family is a big part of the harvest. It’s just something that you kind of look forward to. Even those that aren’t always here on the farm on a daily basis; they’ll show up to help with harvest,” said Joe Kejr, Ottawa County wheat farmer. “We actually live in the house I grew up in so we are a family operation and it has been a historical part of our family farm.”

Joe’s wife Geena gives a glimpse into the work and support a farm wife provides during harvest.

“During wheat harvest I definitely get to be one of those gofer people and help move field to field and pull a header. But also my big role is to get the guys fed at night. We pack a cooler for lunch for noon and try to have supper out to the field between 6 and 7 p.m. and then trade off and keep those machines rolling. Counting the fifth generation on our farm, we

feed about 20 people a night.

When we’re trading out, I shift out the grain cart drivers so they get to eat,” said Geena.

Beyond the farm Where does wheat go after harvest? We know that wheat is ground into flour but how does this work exactly? After Kansas wheat is harvested and taken to the elevator, it is either shipped by train to Mexico or the Gulf to be exported, or to flour mills within the states.

At the mills, wheat goes through a cleaning process to separate any impurities such as corn, chaff, or soybeans that might be in the grain.

“We use air to aspirate the dust. We use large screens and small

screens to separate large and small impurities. The vibratory action of the cleaner helps to aid the material moving over the tops of the screens,” said Mark Fowler, President of Farmer Direct Foods, a flour mill in New Cambria, Kansas.

Once the wheat at Farmer Direct Foods is cleaned, it is stone ground into flour, packaged and shipped to grocery shelves across the country.

The 2016 Kansas wheat harvest will soon come to a close, but farmers are already making decisions about next year’s crop. They will need to decide what varieties they will plant based on how well their crop this year handled the weather, pests and diseases thrown at them. Although 2016 was a good year for Kansas wheat yields, farmers and their families will begin preparing for whatever 2017 brings.

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June 2016

STAKEHOLDER NEWS BRIEF Moving the Mission June is an exciting time in Kansas.

It normally means hot, sunny weather and the start of wheat harvest throughout the state. It is an important time of year for the entire grain industry as farmers, custom Pat Hackenberg cutters and grain elevators experience two to three weeks of intense activity to complete the majority of the harvest within that period. It’s common to see long lines of trucks waiting to unload at local elevators, and combines running late into the evening. This year’s harvest was good overall, with many areas of the state reporting high yields, sometimes in excess of 100 bushels per acre.

June at the IGP Institute was also a busy time, as we hosted several trade teams, and held the Buhler-KSU Executive Milling course, a food safety modernization act training with more than 60 participants and the Flour Milling Course for U.S. Wheat Associates Nigerian/South African Milling two-week training.

The U.S. Wheat course has become an annual event as the participants take advantage of the local wheat harvest

by traveling throughout central Kansas on a field trip to visit and tour a flour mill in Newton, a large grain elevator in Salina, and a wheat field being harvested.

This year we were hosted by Joe Kejr at one of his fields near Salina. The course participants were able to ask questions and receive answers from Joe and his family.

The highlight of the yearly visit is a chance for our guests to ride along in a combine during harvest. We appreciate Joe and all of our local producers who help us share firsthand knowledge of agricultural practices in Kansas.

The IGP Institute faculty and instructors also traveled to multiple locations in the U.S., Africa, and Mexico where they shared their expertise and knowledge to help promote U.S. and Kansas grain exports across the globe.

Please enjoy the rest of the newsletter for additional details about our activities this month.

Pat Hackenberg Educational Media Coordinator

In the Spotlight • Mill Manager, Pioneer Foods • Resident of Bethlehem, South Africa

Zane Opperman

• Participant in the Flour Milling Course for U.S. Wheat Associates Nigerian/ South African Millers “What IGP does for the industry is a great way to improve on the process, business, each country and the world.”

Participants in the Flour Milling Course for U.S. Wheat Associates Nigerian/South African Millers visited Joe Kejr’s farm during wheat harvest near Salina, Kansas.

1980 Kimball Avenue, 102 IGP Institute Conference Center | Manhattan, KS 66506–7000 | Tel. 785-532-4070 | Fax 785-532-6080 | www.grains.k-state.edu/igp | igp@ksu.edu

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Where in the World A monthly look at where we’ve been as we make our way around the globe promoting U.S. commodities and IGP Institute training opportunities.

• Gave a presentation on World Wheat Supply and Demand to Kansas Wheat team from Nigeria.

• Hosted a training class from Lansing Grain in Kansas City, Kansas.

• Traveled to Burkina Faso and Ethiopia to work on the Appropriate Scale Mechanization Consortium from the United States Agency for International Development (USAID) Sustainable Intensification Innovation Lab. • Traveled to Mexico City, Mexico and Guadalajara, Mexico with U.S. Soybean Export Council (USSEC) for technical visits.

• Participated as a speaker at Mexican Association of Feed Producers (AMEPA) annual pet food forum called: ”Foro de Mascotas” in Guadalajara, Mexico.

• Presented at the National Association of Feed Mill’s (ANFACA) and AMEPA’s annual joint Feed Technology Meeting in Guadalajara, Mexico.

Trainings and Activities Courses and activities held in June.

• Led Buhler-KSU Executive Milling Course.

• Conducted Flour Milling Course for U.S. Wheat Associates Nigerian/South African Millers.

• Offered National Grain and Feed Association-KSU Food Safety Modernization Act Feed Industry Training.

• Hosted Jeff Coey, U.S. Wheat Associates from the Hong Kong office.

• Met with African Trade Team.

• Held Midwestern Association of State Departments of Agriculture (MASDA) Team.

Course Manager Shawn Thiele instructs participants during the Flour Milling Course for U.S. Wheat Associates Nigerian/ South African Millers.

Rave Reviews “I enjoyed interacting with different people during the course. It has been a great experience to talk to other people about their experience including hearing the challenges they have and solutions they’ve come up with,” Gifford says. “I’ve had a great experience and I am looking forward to attending another course.”

– Kyle Gifford, Finance Professional, Birkett Mills, Pen Yann, New York Buhler-KSU Executive Milling participant

“It was a week with a lot of information and a lot of input that I will take away with me. I now have a better understanding of wheat milling.”

– Malick Diedhiou, Grains Trader, Louis Dreyfus Company Buhler-KSU Executive Milling participant

“We’ve learned a lot and gone into a lot of detail and that will benefit us. There is a lot we can take away from that we plan on implementing.”

– Zane Opperman, Mill Manager, Bethlehem, South Africa Flour Milling Course for U.S. Wheat Associates Nigerian/ South African Millers

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News from : NAWG Weekly Updates June 2, 2016 NAWG Comments on New Herbicide Quelex NAWG recently provided comments to the Environmental Protection Agency (EPA) regarding the proposed label for Quelex herbicide with Arylex active.

Developed by Dow AgroSciences, Quelex is a low-dose, postemergence herbicide which is the first new active ingredient herbicide brought to the market for wheat crops in over twenty years. Facing increased weed pressure that reduces yields, wheat growers across the country look to new products that will offer greater flexibility in crop rotation, due to the lack of herbicidal residues for crop rotation or double-cropping practices. NAWG wants to ensure that the EPA continue to allow the use of tank mixing, an important practice used by growers across the country. Tank mixing herbicides allows producers to be more sustainable with fewer trips across the field. NAWG supports the development of herbicides which RediscoverWH WH E AT| JULY | JULY 2016 8 8Rediscover E AT 2016

will increase yields for wheat growers and help to eliminate costly practices, while aligning with the conservation efforts that wheat growers already have in place.

NAWG Registers Comments for New Dicamba Products NAWG has had the opportunity recently to comment on the registration of dicamba products on dicamba-tolerant crops to the Environmental Protection Agency (EPA). In commenting on the registration of the muchneeded dicamba products, NAWG reiterates its support for weed control products which address the recent emergence of glyphosate-resistant weeds, creating a need for new weed control methods. New dicambabased herbicides will be critical to help solve the spreading problem of resistant weeds. Dicamba has many benefits, including a brief soil residual, allowing for effective crop rotation, and its compatibility with necessary practices such as tank mixing. NAWG believes that wheat growers need access to new

technologies to manage difficult weeds, reduce weed seed density, and increase yield potential, and has urged the EPA to approve the registration of new dicamba products for use on dicambatolerant crops.

Deadline for Complying with Actively Engaged Rule Extended As required by the 2014 Farm Bill, the U.S. Department of Agriculture (USDA) undertook a rulemaking last year to revise the “actively engaged� requirements for eligibility to receive Title 1 farm program payments for nonfamily farming operations. USDA finalized its rule on December 15, 2015. When it was finalized, the announcement stated that the rule would be applicable for the 2016 crop year for producers who only have spring-planted crops and effective for the 2017 crop year for producers who have both spring- and fall-planted crops. For producers with just spring-planted crops, the initial deadline for compliance was June 1st. USDA announced on May 27

a 30-day extension for recording farm organization structures for purposes of “actively engaged” determinations.

As background, the final “actively engaged” rule, which exempts operations comprised entirely of family members, would apply to general partnerships and joint ventures where an operation is attempting to qualify more than one farm manager. The rule would limit such operations to up to three individuals qualifying as farm managers, given certain conditions, and requiring such individuals to make a “significant contribution” of active personal management or a significant contribution of the combination of active personal labor and active personal management. The text of the rule includes additional details describing what constitutes a significant contribution, generally in terms of time commitments.

USDA’s “actively engaged” information page can be found at http://www.fsa.usda.gov/ programs-and-services/paymenteligibility/actively_engaged/index.

USDA Announces Nationwide Streamlining of Crop Reporting The U.S. Department of Agriculture (USDA) announced that it was expanding nationwide a streamlined crop reporting program that was previously a pilot program. This program, referred to as the USDA Acreage Crop Reporting Streamlining Initiative (ACRSI) is an interagency initiative to enable farmers to file crop acreage reports at either their local Farm Service Agency (FSA) office or with participating insurance providers approved by the Risk

Management Agency (RMA).

Once reported to one of the offices, that information will then be securely and electronically shared with the other location.

Through this initiative, 93 percent of all annual reported acres to FSA and RMA will be eligible.

Though this information will be shared between the agencies, producers will still be required to validate and sign acreage reports, complete maps, and provide program-specific information at both locations.

In USDA’s announcement, FSA Administrator Val Dolcini also reminded producers that individual FSA farm information, such as field boundaries, farm images, conservation status, and other info, can be accessed electronically through the Department’s new customer self-service portal, referred to as FSAFarm+.

More information about the ACRSI program and the selfservice portal can be obtained for your local FSA office or through FSA’s website at http://www.fsa. usda.gov/.

USAAC and GEA Sign Historic Memorandum of Understanding The U.S. Agriculture Coalition for Cuba (USACC) and Group Empresarial Agricola (GEA), which is the designated USACC counterpart in Cuba, signed a Memorandum of Understanding (MOU) to facilitate increased cooperation between the U.S. and Cuba on food and agriculture.

In signing this MOU, USACC (of which NAWG is a member) and GEA have committed to discuss such topics as agriculture financing and credit, which

currently complicates trade with Cuba, two-way trade, production, processing, and more. The GEA, which is an entity of the Ministry of Agriculture that represents 72 entities in every province of Cuba, will interface with USAAC to progress towards a more constructive commercial relationship going forward.

USAAC believes that normalizing trade relations between the U.S. and Cuba will open the market for American producers, while driving growth in both countries and addressing Cuban citizen’s food security needs. The current financing restrictions make trade with Cuba difficult for American producers, and USAAC believes that open trade and the elimination of the embargo benefit both countries. The MOU will act as a facilitator of communication, learning, and the potential for growth as the two entities discuss the issues that are necessary to facilitate trade.

NAWG supports and encourages USAAC’s work in Cuba and hopes that developments in relations with Cuba will benefit not only U.S. wheat farmers, but Cuba’s citizens as well.

NAWG Continues to Search for Interns Although it is late into the internship season, NAWG continues to search for a summer or fall intern, and encourages all college sophomores, juniors, seniors, or recent graduates to apply for NAWG’s internship.

Responsibilities will include supporting the communications department in social media and press outreach, as well as assisting the policy department in legislative work. The internship is paid, and the start and end dates Rediscover E AT 2016 RediscoverWH WH E AT| JULY | JULY 201699

are flexible. NAWG’s internship would be a great opportunity for any student in an agriculturerelated program, or who plans to pursue an agriculture-related career post-graduation. NAWG also requests all recipients of this newsletter to pass on this notice to any interested friends or family members. More information can be found on NAWG’s website at http://www.wheatworld. org/wp-content/uploads/2016NAWG-Internship-ProgramDescription.pdf. Please note that the application deadline and start date will be extended to suit the intern’s needs.

June 9, 2016 USDA Announces Cotton Ginning Cost-Share Program Agriculture Secretary Tom Vilsack announced that the U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) will begin to implement a cost-sharing program for cotton producers, providing an estimated $300 million in assistance payments, in order to strengthen and maintain the domestic marketing of cotton. Through this program, cotton producers will receive one-time payments based on their 2015 reported cotton acres, multiplied by 40 percent of the average ginning cost for each production region. With this new program, the USDA intends to address low cotton prices and a global oversupply which has pushed cotton producers into a period of economic uncertainty, leading to a loss of equity and land. The effects of the Cotton Ginning Cost-Share (CGSC) program will reverberate through the broader marketing chain associated with cotton and 10Rediscover RediscoverWH WH | JULY 2016 10 E EATAT| JULY 2016

cottonseed, including cotton gins, cooperatives, marketers and cottonseed crushers and the rural communities that depend on them. The sign up period for the CGSC program is June 20, 2016 through Aug. 5, 2016. FSA will mail pre-filled forms to producers, and producers can also stop by their local FSA offices for more information.

National Wheat Yield Contest Spurs Innovation Spring wheat growers still have an opportunity to enter the spring wheat sector of the National Wheat Foundation’s (NWF) National Wheat Yield Contest (NWYC), as the final date to register an entry is August 1.

Registration for the Fall Wheat sector of the contest ended May 1. National winners will be announced in Fall 2016, and will attend the 2017 Commodity Classic in San Antonio, Texas, as guests of NWF. NWF has partnered with industry leaders such as BASF, Monsanto, John Deere, and WinField, to provide our nation’s wheat growers the opportunity to utilize new and expanding technology to achieve higher yields and better quality crops, while highlighting sustainable practices that are in line with conservation efforts to preserve the environment and maintain farm productivity.

“The wheat industry is at a point where innovative farmers are having a huge impact on the development of best practices and techniques. The NWYC will enable the sharing of those techniques to bring more wheat growers to the cutting-edge of innovation,” says NWF Chairman Phil McLain.

The technologies developed by these industry leaders will help farmers optimize their fields’ potential, and provide a new standard of excellence for wheat varieties.

EPA Proposes new Renewable Fuel Levels Under Clean Air Act The Environmental Protection Agency (EPA) proposed the volume requirements and associated percentage standards that apply under the Renewable Fuel Standard program in calendar year 2017 for cellulosic biofuel, biomassbased diesel, advanced biofuel, and total renewable fuel. EPA is also proposing the volume requirement for biomassbased diesel for 2018. EPA’s proposal would establish volume requirements that would be lower than the statutory targets set by Congress for fuels other than biomass-based diesels. EPA’s position for the lower levels is that they believe these levels would allow the U.S. to move away from fossil fuels and towards a more efficient renewable fuel source, while also accommodating the challenges that have slowed progress. The EPA set Renewable Volume Obligations (RVOs) lower than the statutory figures by exercising waiver authority over the Renewable Fuel Standard, claiming that the infrastructure necessary to implement the statutory figures was not sufficient, but that their proposed levels would still spur growth in renewable fuel use. Biofuel companies have responded negatively, stating that the proposed levels should be at the highest level mandated

by Congress, to promote use

of renewable fuels. NAWG too supports a higher levels of biofuels requirements and following Congressional intent. Changes made to the RVO requirements send the wrong market signals, impacting agricultural markets and investments in new technology and cellulosic biofuel production.

Senate Panel Reviews Highway Bill Implementation On June 8, the Senate Commerce, Science, and Transportation Committee held a hearing reviewing implementation of the Fixing America’s Surface Transportation (FAST) Act, which is the legislation generally referred to as the “highway bill.” This bipartisan legislation is a five-year reauthorization of surface transportation agencies and programs and was approved

by Congress last December. This was also the legislation that reversed a $3 billion cut to the crop insurance delivery system that was originally included as part of the November budget agreement.

U.S. Transportation Secretary Anthony Foxx testified before the Committee where he discussed progress that has been made thus far on implementing new funding tools for road construction and repair projects. He also discussed how the Department is responding to the challenges outlined in a report that was released last year called “Beyond Traffic,” which discussed the inefficiencies in the freight rail system and the importance of establishing a broader multimodal system. The study indicated that freight volume will grow by 45% in 2040, as compared

to the 2014 volume. This growth in volume will of course have implications for the transport of agricultural products and exemplifies the need for sufficient investment in our infrastructure.

More information about the hearing, including video and testimony, can be found at http://www.commerce. senate.gov/public/index.cfm/ hearings?ID=E7F7015A-88E04DF6-A8C8-0BA757CB4522.

House Committee to Review U.S. Agricultural Trade The House Ways and Means Subcommittee on Trade, chaired

by Representative Dave Reichert (R-WA), held a hearing entitled, “Expanding U.S. Agricultural Trade and Eliminating Barriers to U.S. Exports.” The hearing was at 10:00 a.m. eastern time on Tuesday, June 14. According to the announcement, the hearing will focus on U.S. successes as the world’s largest agriculture exporter, including job creation and economic growth; foreign tariff and non-tariff barriers faced

by U.S. agriculture exports; and how current and future trade agreements and other efforts can reduce those barriers.

June 16, 2016 NAWG Comments on Pesticide Registration Process NAWG provided comments in a letter to the Environmental Protection Agency (EPA) on their efforts to review pesticides and develop assessments related to endangered and threatened species. The letter stated that NAWG is concerned about the process for reviewing pesticides,

the data used to create the biological evaluations, and the fact that EPA only provides 60 days for comment on over 12,000 pages of documents, which NAWG believes does not allow sufficient time for review. NAWG believes that the registration review interim process for the organophosphates has not accomplished any meaningful policy or improvements to effectively screen chemical risk, as well as being overly complicated. The complicated process as well as the potential for increased costs, unpredictable decisions, and impractical use direction could all lead to fewer new crop protection products and technologies. NAWG is concerned that chlorpyrifos, which is an important pest management tool wheat growers use to address insect outbreaks, will not be accurately evaluated, leaving wheat growers with supply uncertainties and cost increases.

Philippines Media Team Met with U.S. Wheat Associates and NAWG A media team from the Philippines met with policy and trade staff from U.S. Wheat Associates and NAWG, to give an overview of the U.S. wheat industry and its challenges and accomplishments in addressing supply and demand, productivity, quality, trade barriers, GMO labeling, and more. NAWG staff gave an overview of its role in the wheat industry and updated the representatives on NAWG’s efforts to urge Congress to move on the Trans Pacific Partnership (TPP), which has been stalled due to political disagreements. Additionally, U.S. Rediscover E AT 2016 RediscoverWH WH E AT| JULY | JULY 201611 11

Wheat staff reviewed the current market environment for wheat, particularly regarding free trade agreements with Asia-Pacific countries involved in plans for TPP. U.S. Wheat staff covered wheat’s trade relationships with the Philippines, while the Philippine media reps shared the general attitude towards wheat quality, biotech products, and trade in the Philippine wheat industry. NAWG continues to maintain relationships with wheat-trading countries and believes that with continued engagement, Congress will move to act on TPP soon.

Senate Committee Adopts Amendments to Expand Trade, Travel with Cuba The Senate Appropriations Committee considered and approved on a 30-0 vote its version of the FY 2017 Financial Services Appropriations bill.

During consideration of the bill, the Committee approved amendments that would build upon actions taken by the Obama Administration to expand agricultural trade with Cuba. One of the biggest barriers to trade is an inability of U.S. financial institutions to finance sales of agricultural products to customers in Cuba.

The Committee approved an amendment that would lift this restriction. Additionally, an amendment was adopted that would lift current travel restrictions to Cuba. Earlier this week, NAWG was a part of a collective effort of the U.S. Ag Coalition for Cuba in sending a letter to members of the Appropriations Committee

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urging them to oppose any efforts that would undermine trade with Cuba and to support lifting financing restrictions, among other priorities.

Congress Pressures Department of Labor on H-2A Applications Last week, Congressman Dan Newhouse (R-WA) led a bipartisan letter of 102 Members of Congress to U.S. Department of Labor Secretary Thomas Perez and U.S. Citizenship and Immigration Services (USCIS) Director Leon Rodriguez discussing the need to address problems with the administration of the H-2A agricultural guest worker program. There has been widespread reports across the country about serious delays in the processing of applications and visa petitions. This has resulted in significant delays in the arrival of workers to farms that have significant labor needs. The Congressional letter includes several recommendations and urges the agencies to expeditiously process H-2A applications before farmers’ dates of need for labor.

Conservation Districts Conducting Conservation Planning Survey In an effort to improve conservation planning services for farmers and ranchers, the National Association of Conservation Districts (NACD) is conducting a brief online survey of farmers and ranchers.

The purpose of this survey is to obtain feedback on ways to strengthen the delivery of conservation planning assistance

to landowners. This survey asks respondents to identify aspects of the planning process they value, those aspects in which the partnership is doing a good job, and as important, those aspects that need improvement.

This survey takes about 8 to 12 minutes to complete. Responses will be CONFIDENTIAL and all background information will be used for statistical purposes only.

The survey was open through Friday, July 1.

House Appropriations Committee Releases FY17 Interior and Environment Appropriations Bill The House Appropriations Committee approved their FY17 Interior and Environment Appropriations bill. The bill includes funding for the Department of the Interior, the Environmental Protection Agency (EPA), the Forest Service, and other related agencies. The bill provides in total $32 billion, which is $64 million below the FY16 enacted level and $1 billion below the President’s request.

Included in this appropriations is funding for the EPA, which totaled at $7.98 billion, which is $164 million below FY16 enacted level and $291 million below the President’s request. In response to what legislators feel is EPA’s anti-growth agenda which includes harmful and costly regulations, which also burden farmers, the bill will prohibit the EPA from making changes to the definition of “navigable waters” under the Clean Water Act; NAWG supports inclusion of this provision and has opposed

any changes to the definition of “navigable waters.” Under funding for the U.S. Fish and Wildlife Service (FWS), the bill also continued a delay on any further Endangered Species Act (ESA) status reviews, determinations, and rulemakings for greater sagegrouse, the endangered status of which NAWG opposes. The Senate Appropriations Committee also approved legislation with similar riders.

June 23, 2016 Stabenow and Roberts Reach Agreement on GMO Labeling After months of debate, Senate Ag Chairman Pat Roberts (RKS) and Ranking Member Stabenow (D-MI) have produced a preemptive solution to the Vermont bill which goes into effect July 1, and will require mandatory labeling for GMO products, with disclosure options.

The Roberts-Stabenow agreement could come before the full Senate next week, though the House is in recess until July 4.

The preemptive language of the bill will upon enactment block Vermont’s law from being fully implemented, while allowing for two years to develop definitions and rules. More information about the bill can be found at http://www.agriculture.senate. gov/newsroom/rep/press/release/ chairman-roberts-biotechnologycompromise-protects-producersinforms-consumers, and the text of the bill can be found at http:// www.agriculture.senate.gov/imo/ media/doc/Ag%20biotech%20 compromise%20proposal.pdf.

Cuba Amendments Offered in House, but Path Forward Unclear The House Rules Committee made in order two amendments to be considered by the full House of Representatives during consideration of the FY 2017 Financial Services Appropriations bill. The first from Rep. Rick Crawford (R-AR) would lift for FY 2017 the statutory restriction on U.S. financial institutions offering credit for the sale of U.S. agricultural products to Cuba, and the other from Rep. Mark Sanford (R-SC) would lift the travel ban for a year. Last week, the Senate Appropriations Committee adopted similar amendments that would make these changes permanent. These amendments were set to be considered by the House on Wednesday, but consideration of the Financial Services Appropriations bill itself was delayed following a spat between Democrats and Republicans about taking action on gun regulations in the wake of the tragedy in Orlando last week. House leadership decided to adjourn the chamber for recess until after Independence Day. NAWG believes that these two amendments are critical to normalizing trade relations with Cuba, and is hopeful that once the House moves back to consideration of the FY 2017 Financial Services Appropriations bill that these amendments will receive bipartisan support.

Earlier this week, NAWG sent a letter with other members of the U.S. Ag Coalition for Cuba urging House leadership to ease the financing restrictions that limit trade with Cuba. Although the U.S. is well-positioned

geographically to trade with Cuba, foreign competitors take away market share from the U.S. because of our competitive disadvantage resulting from the U.S. trade embargo.

Drones Get Administration, Congressional Attention The Federal Aviation Administration (FAA) issued a final rule addressing regulations for the operation of small Unmanned Aircraft Systems in the National Airspace System (NAS). Prior to this action, commercial drone operators have had to receive a waiver from the FAA before operation; this rule would instead establish rules so that waivers wouldn’t be necessary. Through this action, agricultural and other operators would be allowed to operate drones that weigh less than 55 pounds, though they would be limited to flying up to 400 feet and no more than 100 miles per hour. They would also have to be within sight of the operator and not fly over people.

Separate from this action, the House Agriculture Subcommittee on General Farm Commodities and Risk Management held a hearing to receive input from industry about innovations in agricultural imagery and technology. Among those testifying was former NAWG board member Robert Blair, who is a farmer from Kendrick, ID, and currently the Vice President of Agriculture Measure. He discussed how his family’s farming operation has continually integrated new technology since the farm started in 1903. Throughout the hearing, he discussed how the use of Rediscover E AT 2016 13 RediscoverWH WH E AT| JULY | JULY 2016 13

Unmanned Aerial Vehicles (UAVs) and data can help farmers become more productive, use fewer inputs and do so more efficiently, and reduce the impact of weather on crops. He also discussed the role that the use of such information can play in crop insurance by enabling more accurate assessments and adjusting of claims.

USDA Department of Interior Announces Funding for Water and Energy Efficiency The U.S. Departments of Agriculture (USDA) and Interior (DOI) announced more than $47 million in funding to help water districts and producers on private working lands better conserve water resources. The funds include $15 million in USDA funds and $32.6 million from the Bureau of Reclamation for local projects to improve water and energy efficiency and provide a strengthened federal response to ongoing and potential drought across 13 states in the West. The Bureau of Reclamation funding supports 76 local projects through the DOI’s WaterSMART program. Funding from USDA’s Natural Resource Conservation Service (NRCS) will support on-farm water delivery system improvements through its Environmental Quality Incentives Program, in tandem with the DOI WaterSMART funded competitive grant projects and cost share grants.

More details on the program and projects announced can be found on the WaterSMART Water and Energy Efficiency Grants website and on the Drought Response Program website. Through EQIP, NRCS is 14Rediscover RediscoverWH WHEEAT AT| JULY | JULY 2016 14 2016

providing $5.2 million in on-farm assistance to complement several projects that have been funded previously by BOR, and will provide an additional $10 million in 2017 to support some of the Reclamation projects announced.

NAWG Engages in Field to Market Meetings NAWG Vice President David Schemm and Environmental Policy Advisor Keira Franz participated in Field to Market’s summer plenary, general assembly and work group meetings this week at the McDonald’s campus outside Chicago. Schemm, a grower representative on the Field to Market Board, also attended the board meeting where organizational goals, structure and membership were discussed. The larger events included discussions of supply chain field print projects, development of new metrics as well as updating existing metrics, and data retention policies. Pilot projects involving wheat growers are underway in several states.

Additional information on Field to Market can be found at www.fieldtomarket.org.

Winter Wheat Yield Predicted to Break Records The United States Department of Agriculture (USDA) Economic Research Service (ERS) predicts in a recent report that due to excellent growing conditions over much of the United States, particularly in the Great Plains region, the winter wheat average yield is now projected to be a record high 50.5 bushels per acre, with total production projected at over 1.5 billion bushels.

Additionally, despite an 8-percent year-to-year decline in production

area, this improved outlook for winter wheat will increase 2016/17 aggregate wheat production by 25 million bushels over the 2015/16 crop. According to the report, declines in planted acres have been offset by higher yield gains as compared to last year’s crop and a higher projected harvestto-planted ratio. As of June 1, the winter wheat expected harvested area is 29.831 million acres, down 2.4 million acres from last year, but the projected harvestto-planted ratio is 82.4 percent, slightly higher than 2015’s 81.7 percent. Despite some reports of bad weather and disease, the quality of the 2016/2017 winter wheat crop also remains high, with 62% of the winter wheat reported to be in “good” to “excellent” condition for the week ending June 5. In contrast, the spring wheat production for 2016 is projected to decline 16 percent based on lower planted area, relative to 2015. As of June 5, 96 percent of the spring wheat crop had emerged in the major wheat-cultivating states, which is well above the 5-year average pace of 78 percent. As with winter wheat, reports have stated that 79 percent of the crop is rated “good” to “excellent”. Overall, the weather in winter and spring wheat growing regions has provided excellent conditions for the cultivation of wheat, pushing the entire wheat yield to 50.5 bushels per acre. More information and analysis can be found by visiting the Economic Research Service website.

Farm Foundation Round Table Focuses on Consumer Trends NAWG recently participated in the Farm Foundation Round Table event in Louisville, Kentucky

where the discussions centered around consumer trends shaping the future of agriculture and our food system. Speakers and discussion leaders represented all facets of the food chain including farmers, processors and retailers. Many of the presenters emphasized the need for “transparency” throughout the food chain, as public skepticism and public scrutiny of how food is grown or produced will continue to increase. One national public research company representative indicated that, to many consumers, the term “farming” is still held in high regard but the term “agriculture” represents an institution and can’t be trusted.

He also commented that “if you are trusted, science doesn’t matter; and, if you are not trusted, science still doesn’t matter.”

Many panel members also emphasized that when members of the food chain talk directly with consumers, syntax matters.

Consumers are increasingly wanting to know the story of the food they purchase and eat.

For example, a representative of Burger King explained that product specifications for the food they purchase for their restaurants now go beyond taste, safety, quality and nutrition and include origin and production practices. The Farm Foundation Round Table meets twice annually. An objective of the Farm Foundation is to foster dialogue and build networks to increase understanding of public issues and policies.

Senate Panel Acts on International Seed Treaty On Thursday, June 23 the Senate Foreign Relations Committee approved the International Treaty

on Plant Genetic Resources for Food and Agriculture, which is supported by NAWG. This action follows a May 19 hearing on the treaty, which included testimony from John Schoenecker, Director of Intellectual Property at HM. Clause, on behalf of the American Seed Trade Association (ASTA). The Treaty, which was adopted by the UN Food and Agriculture Organization in 2001, and signed by the U.S. in 2002, would create a stable legal framework for international germplasm exchanges, allowing for facilitation of access by public and private entities for the sharing of plant resources. Though the U.S. has signed the agreement, the Senate must ratify the Treaty in order to enable the U.S. to participate in the framework.

With Committee action complete, the Treaty would now have to be considered by the full United States Senate.

June 30, 2016 Vice President Schemm Named to ADC Advisory Board The Agriculture Data Coalition (ADC) has announced the formation of a farmer advisory board, in keeping to its guiding principle that farmers should be in control of the data collected on their operations. NAWG Vice President David Schemm from Kansas is one of 10 farmers on the board, which will act as an advisory body to assist the ADC in developing a pilot data management system to store agricultural information. The ADC states that its mission is to help farmers utilize the data that they collect every day, by creating a neutral warehouse where data can be stored and controlled

before being uniformly and efficiently transmitted to third parties. For his reason for joining, Schemm states that “the ADC will give us the confidence to move forward because it is farmercentric and understands our concerns, but also understands the value that our data has and how we can better utilize it.” See the other members of the board here: http://agdatacoalition.org/ adc-forms-farmer-advisory-board Senate Releases Long Anticipated GMO Labeling Bill Senate Agriculture Committee Chairman Pat Roberts and Ranking Member Debbie Stabenow have released a longawaited GMO labeling agreement.

NAWG applauds the bipartisan efforts to secure a national standard that preempts a state-bystate patchwork, thereby avoiding a conflict of regulatory laws between states. NAWG supports their proposed bill, which allows for a variety of labeling options which do not vilify biotechnology, such as QR codes, and directions to websites and phone numbers.

In the bill is also included a more narrowly specified definition of biotechnology, that excludes new breeding techniques that are critical to wheat research and other areas of agriculture, and differ from biotechnology.

“GMOs have been scientifically proven to be safe for human consumption and there is no nutritional difference,” says NAWG President Gordon Stoner.

“It is vital that a patchwork of state laws not jeopardize access to safe, sustainably produced food; this national standard will assure food security for generations to come.”

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On June 29, the Senate voted 68 to 29 on a procedural motion to substitute in the RobertsStabenow bill for the previous GMO labeling proposal from Chairman Roberts. Following this, the Senate is expected to hold a cloture vote on July 6, followed by a full bill vote later in the week requiring 60 votes to passage.

USDA Issues Final Double Cropping Rule, Comment Period Open The U.S. Department of Agriculture recently completed several rulemakings affecting the federal crop insurance program.

On June 22, the Federal Crop Insurance Corporation published a final rule amending provisions related to double-cropping and the regulations for when a crop is considered to be “practical to replant.” The changes would be applicable to the 2017 and succeeding crop years for crops with a contract change date of June 22, 2016 or later and for the 2018 and succeeding crop years for crops with a contract change date prior to June 22, 2016.

There are some areas of the country where the growing season lasts long enough to enable farmers the opportunity to harvest a winter wheat crop and then plant a soybean crop on the same land. However, weather conditions can affect the number of acres planted to double-crop soybeans and cause variations from year to year. As a result, it is difficult to establish base acres.

Additionally, the previous rules didn’t account for operations that add on acres in a given year.

As such, the rule change would allow operations to base double 16 Rediscover WHE AT | JULY 2016 16 Rediscover WHE AT | JULY 2016

cropping acres on either the greatest number of acres double cropped in two of the last four years or the percentage of acres historically double cropped in two of the last four crop years. The example given is that if a producer has a 100 acre farm and they’ve historically double-cropped 50 acres of wheat followed by soybeans, and that farm adds an additional 200 acres, the number of acres eligible for double cropping would be 150 acres (50 percent of a total 300 acres).

Though this is a final rule, USDA has initiated a comment period that will be open until August 22, 2016. Instructions for submitting comments are included in the federal register notice.

Food Security Report Indicates Overall Global Food Security Improvement A Global Food Security report released earlier in June indicated that food security continues to improve, particularly in countries with higher incomes and less income spent on food. The report, which was hosted by DuPont and the Alliance to End Hunger, is the 5th release of the index and examined affordability, availability, quality, and safety as indicators of food security. 113 countries were scored, and 89 of those saw their food security improved.

Middle-income and emergingmarket countries saw the most growth, due to having reached the economic and development threshold necessary to enable them to focus on improving government programs to enhance food security. Global growth economically has contributed to structural

improvements that allow more accessibility to affordable, nutritious foods, including expanded safety-net programs, food transport infrastructure, and greater dietary diversity.

Low-income countries, having not yet reached the threshold for improved food security, often lack the basic infrastructure to support systems which allow greater access to food. Political risk, corruption, and lower incomes, as well as the risk of climate change, limit developing countries’ ability to improve their food security. With changing climate and weather patterns as a major factor in pushing up food prices and increasing production volatility, the World Bank estimates that without any action, extreme weather events could lead to crop yield losses as high as 5% by 2030. Although the report overall indicated improved global food security, developing countries still require further support to reach a sustainable level of food security on par with middle-income and developed countries.

Bierocks Ingredients

Bread Dough or 2 lbs. frozen bread dough, defrosted 1 ½ cups water (110°F - 115°F) 1 (¼ ounce) package instant yeast 3 tablespoons sugar 4 – 4 ½ cups all-purpose flour, divided (may be part whole wheat flour) 1 teaspoon salt 3 tablespoons unsalted butter, softened

Directions 1. In the bowl of a stand mixer fitted with paddle, combine water and yeast.

Wait 5 minutes for mixture to foam (proof).

2. Stir in sugar, 3 cups flour, salt and butter. On medium speed, beat 2 minutes. Exchange paddle for dough hook; gradually add enough remaining flour to form a workable dough. Knead on low speed 6- 8 minutes, or until smooth and elastic.

3. Transfer dough to a greased bowl.

Cover; let rise 30 minutes.

4. To make filling: brown ground beef and thoroughly drain. Add cabbage, onion, black pepper, salt and hot pepper sauce. Cook on low until vegetables are tender.

5. Deflate the dough, let rest 10 minutes. Preheat oven to 400°F. Line two baking sheets with parchment.

6. Transfer dough to lightly floured work surface; divide in half. Roll half into a 15” x 10” rectangle. Cut into six 5” squares.

7. Portion about ½ cup filling in the center of each square. If desired, top with shredded cheese. Pick up corners of each square and pinch together. Pinch each diagonal seam so square is sealed well. Place seam-side down on baking sheet. Repeat with remaining dough and filling.

8. Bake 15-18 minutes or until golden brown. Remove bierocks from oven and if desired, brush with melted butter.

Serve warm or freeze and reheat.

Traditional Bierock Filling 1 pound lean ground beef 6 cups finely shredded cabbage 1 ½ cups finely chopped onion (1 large) 1 teaspoon black pepper ¼ teaspoon salt Bottled hot pepper sauce (to taste) 1 cup shredded Cheddar cheese (optional) 1 tablespoon butter, melted

(optional)

Nutrition Information

Makes 12 large bierocks.

(1 LARGE BIEROCK, 177g): 290 calories, 16g protein, 43g carbohydrates, 3g fiber, 6g fat, 3g saturated fat, 0g trans fat, 35mg cholesterol, 107mcg folate, 275mg sodium, 14mg vitamin C, 4mg iron, 32mg calcium.

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News from : June 2, 2016 Supply Factors Affecting the MGEX-KCBT Spread

By Stephanie Bryant-Erdmann, USW Market Analyst Over the past fifteen years, Minneapolis Grain Exchange (MGEX) hard red spring (HRS) wheat futures averaged $0.27 per bushel over Kansas City Board of Trade (KCBT) hard red winter (HRW) futures. On May 5, however, the spread widened to $0.90 per bushel. Year to date, the average difference is $0.50 per bushel, nearly double the 15-year average. The reason, as usual, involves fundamental supply factors.

Farmers in the United States and Canada seeded much less high-protein spring wheat (13.0 percent or greater on a dry matter basis), which propped up MGEX futures. On March 31, USDA released its Prospective Plantings report pegging 2016/17 U.S. spring wheat area at 4.33 million hectares (10.7 million acres). That would be down 14 percent year-over-year, if realized. A farmer survey by StatsCan suggests that Canadian spring wheat planted area will be 6 percent lower year-over-year at 18Rediscover RediscoverWH WH E AT| JULY | JULY 2016 18 E AT 2016

6.50 million hectares (16.0 million acres).

3.86 MMT, 46 percent lower than the 5-year average.

Planting is well underway in both countries. As of May 22, USDA reported U.S. spring wheat planting at 95 percent complete, outpacing the 5-year average of 77 percent. Seventy-eight percent of U.S. spring wheat has emerged, in contrast to just 51 percent at this time in 2015. USDA rated 76 percent of U.S. spring wheat in good or excellent condition, compared to 69 percent one year ago.

On the other side of the MGEXKCBT wheat futures spread, favorable weather throughout the spring has boosted yield potential and pressured KCBT HRW wheat futures lower. The improved yield potential is reflected in the National Agricultural Statistics Service (NASS) May 10 estimate for HRW production of 23.5 million metric tons (MMT) or 862 million bushels. If realized, 2016/17 HRW production would be 8 percent higher than the 5-year average, and 17 percent greater than 2015/16 HRW production despite 10 percent less planted area year-over-year. If that yield potential makes it to the bin, U.S. HRW supplies could reach 31.5 MMT (1.16 billion bushels), 4 percent higher than the 5-year average.

With warm, dry conditions, Alberta spring wheat planting was 84 percent complete as of May 17, up from 56 percent the week before. Much-needed rains slowed Saskatchewan spring wheat planting, reported as 51 percent complete by May 16.

That delay put Canadian seeding slightly behind last year’s pace of 63 percent complete on the same date.

USDA pegged 2016/17 U.S. HRS carry-in stocks at a 29-year high of 8.11 MMT, which, if realized, would be 41 percent higher than the year prior. Across the northern border, USDA expects Canadian all class wheat 2016/17 carry-in stocks to fall to a record low of

Favorable weather that increases yield potential may also create the right environment for wheat diseases to establish. However, many U.S. HRW farmers took action to protect their crop and did not cut back on fertilizer. “Farmers invested in their HRW crop this year despite very low wheat prices because they saw the positive impact fertilizer and

disease protection had last year on yields and quality,” said Kansas Wheat CEO Justin Gilpin.

On May 22, USDA rated 62 percent of winter wheat in good or excellent condition, compared to 45 percent in 2015, and 75 percent of winter wheat has headed, ahead of 66 percent in 2015. However, there is increasing concern that an unusual period of rain has significantly delayed harvest in Texas and Oklahoma and may hurt quality and yield in the region.

While the current supply factors for the HRS market are certainly more bullish than for HRW, export prices for both classes remain very attractive. Nothing has changed the fact that the U.S. wheat store is always open with the variety of classes, protein and other quality specifications to meet even the most exacting end-product needs.

To track cash markets for all classes of U.S. wheat, subscribe to the weekly USW Price Report at http://www.uswheat.org/ subscribe1 Philippine Business Reporters to Get First Hand Look at U.S. Wheat Supply Chain For more than 54 years, USW has provided trusted information about supply, quality and functionality of U.S. wheat and useful technical service to millers and the broader wheat foods industry in the Republic of the Philippines. This work, supported by farmers and export market development program funding administered by USDA’s Foreign Agricultural Service (FAS), has created a strong preference for U.S.

wheat in this Southeast Asian nation.

To help sustain that preference, USW has invited four influential Philippine journalists to the United States June 8 to 18, 2016, to learn more about U.S. wheat quality improvement, production and marketing. Ric Pinca, executive director of the Philippine Milling Association and Joe Sowers, USW assistant vice president and regional director for South Asia in the Manila office, will lead the team on visits to the Pacific Northwest (PNW) and Washington, DC. “The Philippines is still a developing country so food can be a very sensitive issue,” Sowers said. “Cost and outside influences often get attention, sometimes in ways that do not reflect the real situation, and Filipinos have questions about why so much U.S. wheat is imported. We want to show these influential reporters that our production and marketing systems are transparent and benefit the wheat food industry and consumers in the Philippines.”

In the PNW June 8 to 14, the reporters will follow the path U.S. wheat takes from the breeders’ field trials to a bulk vessel bound for an overseas port. USW’s West Coast Office in Portland, OR, in cooperation with the Oregon Wheat Commission, the Washington Grain Commission and the Idaho Wheat Commission will demonstrate U.S. wheat quality maintenance from breeding and production through transportation. The reporters will also watch Federal Grain Inspection Service (FGIS)

officials independently certify that U.S. wheat meets buyer specifications before it is loaded for export.

In Washington, DC, June 15 to 17, USW headquarters staff will review the world and U.S. wheat supply and demand situation and how U.S. prices are determined. The reporters will meet with representatives from the domestic and export grain trade as well as USDA officials to discuss how the activities of several agencies benefit buyers.

Policy developments, including the Trans-Pacific Partnership, are also on the agenda. Finally, the team will learn more about the U.S. milling and wheat foods industries and discuss such common issues as wheat food safety and nutrition before departing for the Philippines on June 18.

African Flour Millers to Assess U.S. Wheat Quality and Trade Opportunities Reliable ingredient sourcing and supply are key to any market functioning successfully. For 15 years, Nigerian millers have traveled to the United States to take stock of their primary supply of HRW wheat. This year, three milling executives from South Africa, the Ivory Coast and Ghana are joining five Nigerians on a team that will travel to Texas, Kansas, North Dakota and Minnesota June 12 to 24, 2016, to assess trade opportunities and U.S. wheat quality.

“The milling industries in these countries rely on an uninterrupted supply of quality wheat,” said Gerald Theus, USW regional assistant director for Sub-Saharan RediscoverWH WHEEAT AT| |JULY JULY2016 2016 19 19 Rediscover

Africa in the regional Cape Town, South Africa office. “In competitive markets where we face new challenges, there is nothing more valuable than connecting these participants directly with the farmers and other members of the supply chain.”

USW collaborated with the Texas Wheat Board, Kansas Wheat Commission, North Dakota Wheat Commission and Minnesota Research and Promotion Council to organize and host this trade team. Theus and James Ogunyemi, USW technical consultant for the Lagos, Nigeria, office, will lead the team.

In marketing year 2015/16 (June to May), Nigeria was once again one of the largest buyers of all U.S. wheat classes and is the dominant buyer in USW’s Sub-Saharan Africa region having imported more than 1 million metric tons (MMT) of hard red winter (HRW).

The market development activities USW followed there provides a foundation for other nearby countries including Ghana and the Ivory Coast. South Africa is a steady if not large wheat importer but with good potential.

“This team represents major milling groups in each of their respective countries,” said Theus. “Mills throughout Africa appreciate the high milling quality characteristics of U.S. wheat and its superior baking aspects.”

Bringing these buyers to see U.S. wheat quality and to discuss ways to keep their importing costs down is a very important activity during a time of very aggressive competition. Throughout the tour, the team will meet with various 20Rediscover RediscoverWH WH | JULY 2016 20 E EATAT| JULY 2016

grain merchandisers and state wheat commissions, and visit farmers in each state to see the progress of the 2016/17 wheat crop. In Texas, the team will visit the Port of Corpus Christi and in Kansas, their stops include the Kansas Wheat Innovation Center, USDA’s Center for Grain and Animal Health Research and IGP Institute. During their travel to North Dakota and Minnesota, the team will meet with wheat breeders and tour the Alton Grain Terminal, Duluth Seaway Port Authority and CHS Export Terminal.

Congress Acts on Key Funding Priorities for Wheat Production System

By Josh Tonsager, Legislative Director, National Association of Wheat Growers Congressional action this year on policy priorities important to wheat farmers has taken some unexpected turns and the outlook for the legislative process is unclear. By now, this should not come as a surprise to anyone who has been following Congress the past several years. What should come as a surprise, though, is just how well critical programs for the wheat industry have fared thus far through the process Congress uses to appropriate federal funds.

Both the House and Senate Appropriations Committees have reported their respective versions of the FY 2017 Agriculture Appropriations bill, which funds the operations of USDA and the Food and Drug Administration (FDA). The National Association of Wheat Growers (NAWG), in conjunction with the National

Wheat Improvement Committee, advocated for a funding increase for the U.S. Wheat and Barley Scab Initiative, which helps fund research intended to combat fusarium head blight. While the current Farm Bill authorizes up to $10 million per year for the program, actual funding has only been $6.7 million annually.

Our organizations advocated for full funding, and we are pleased that both the House and Senate bills included an increase of $2 million. This is a significant step forward in the fight against a very costly wheat disease. This funding requires full House and Senate membership debate and approval, which could occur in June.

In addition to the Agriculture spending bill, NAWG is actively supporting transportation infrastructure investments through a broad coalition called the Ag Transportation Working Group. NAWG is working collaboratively to ensure continued support for inland waterways infrastructure, including the maintenance of our locks, dams and harbors through the FY 2017 Energy and Water Appropriations bill (see USW Ready to Help Customers Adjust to Columbia Snake River System Upgrade for more information).

The Senate approved its version of the bill on a 90-8 vote on May 12.

It included the coalition’s request of the full use of funds through the diesel fuel tax (this has sometimes been limited) for the Inland Waterways Trust Fund as well as $3.17 billion for dredging, repairs, and operations to improve our waterways and help hold down basis cost for buyers and sellers.

The House version of the bill also includes full use of revenues available for the Inland Waterways Trust Fund and about $3.137 billion for dredging, repairs and operations. The status of the House bill, however, is unclear at this time. On May 26, a vote on passage of the bill failed on the House floor, reportedly because that version included a controversial provision that was unrelated to our priorities.

A healthy wheat production system, combined with an efficient waterway, rail and highway systems and continued funding for USDA/Foreign Agricultural Service export market development programs, are critical for the United States to remain the world’s most reliable supplier. NAWG, with input from USW, will stay engaged in the appropriations process in an effort to secure sufficient federal funding for the programs that ultimately benefit U.S. wheat farmers and their downstream customers at home and abroad.

Wheat Industry News NAWG Selects New CEO. NAWG has introduced Texas native Chandler Goule as its next chief executive officer and executive director of the National Wheat Foundation beginning July 5, 2016. He will replace Jim Palmer, who is stepping down after three years. Goule comes to NAWG after serving several years with the National Farmers Union, most recently as senior vice president of programs, and in staff positions in the U.S. House of Representatives. USW wishes to thank Jim Palmer for his successful tenure with NAWG

and looks forward to working with Chandler Goule on common challenges and opportunities.

Read more information at www. wheatworld.org.

Thank You, Fran Leiphon. On June 8, the North Dakota Wheat Commission (NDWC) will honor the long and faithful service of wheat farmer and board member Fran Leiphon. “I want to extend my thanks to Fran on behalf of all of the USW staff,” said USW President Alan Tracy. “His service as a USW director was a valuable contribution to our mission on behalf of U.S. wheat farmers.

Fran served most recently as chair of our Long Range Planning Committee, which guides our strategic planning and helps us identify and plan for the changes our industry will face. In that role, he was willing to ask questions, solicit other opinions, confront hard realities and articulate complex issues. We will miss his calm and steady leadership and his easy fellowship. We send our deepest appreciation and thanks and our best wishes for the future.”

U.S. Flour Recall is Not a Cause for Concern. General Mills, Inc., the largest retail flour seller in the United States, recently announced it has voluntarily recalled more than 283,000 kg of branded flour “out of an abundance of caution” because of a possible link to an outbreak of E. coli. General Mills is collaborating with U.S. health officials to investigate the cases and said to date, the strain of E. coli in the current outbreak has not been found in any of its flour products nor in the company’s flour manufacturing facility. The

company said based on shared information, some of the ill consumers (38 cases reported since December 2015) may have also consumed raw dough or batter. “As a leading provider of flour for 150 years, we felt it was important to not only recall the product and replace it for consumers if there was any doubt, but also to take this opportunity to remind our consumers how to safely handle flour,” said Liz Nordlie, president of General Mills Baking division.” Visit the http://www.generalmills.com/en/ News/NewsReleases/Library/2016/ May/flour/61cede4c-0536-4ccb87f1-01a84e61ba53 for more information.

AIB Announces New Baking Process Kill Step Calculator for Soft Cookies. AIB International’s has added a soft cookie product profile to their lineup of Baking Process Kill Step Calculators.

This breakthrough industry tool empowers bakeries to validate their food safety preventive controls and accurately evaluate Salmonella destruction in bakery products, meeting FDA’s Food Safety and Modernization Act (FSMA) requirement to validate and verify thermal processes to ensure product safety. All calculators and published are available for free download on AIB’s website at http://www. aibonline.org/aibOnline/developyour-product-solutions/bakingprocess-kill-step-calculators.aspx A Home for Hard White.

Kansas Wheat is helping farmers with hard white (HW) wheat find local elevators that are capable of taking this class. Companies in Kansas accepting hard white RediscoverWH WHEEAT AT| |JULY JULY2016 2016 21 21 Rediscover

wheat include, but are not limited to, ADM in eight locations, Bartlett Grain in seven locations, Skyland Grain at all locations, Alliance Ag in two locations, Midland Marketing in three locations, the Scoular Company in two locations and Scott Co-op in five locations. Read more online at kswheat.com/hardwhite.

IGP Institute Risk Management Short Course.

This course, scheduled for Aug. 1 to 5, 2016, at the IGP Institute Conference Center in Manhattan, KS, focuses on principles of risk management and commodity price control. The course includes basic and advanced sections on why, when and how to trade commodity futures and options.

For more information and registration, visit www.grains.kstate.edu/igp/.

Subscribe to USW Reports.

USW has added a “Subscribe” menu at www.uswheat.org where visitors may subscribe to this newsletter, the weekly Price Report and the weekly Harvest Report (available May to October.)

Follow USW Online. Visit our page at www.facebook.com/ uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter. com/uswheatassoc, additional photos at www.flickr.com/ photos/uswheat, plus video stories at www.youtube.com/ uswheatassociates.

June 16, 2016 Production Forecast Add Some Balance to Global Supply and Demand

By Stephanie Bryant-Erdmann, USW Market Analyst In its monthly World Agriculture Supply and Demand Estimate, USDA projected a more balanced Supply and Demand situation for wheat than those seen in recent years. While its latest world wheat production estimate of 731 million metric tons (MMT) is up because of improved growing conditions, USDA also expects 2016/17 global consumption to set a new record for the fourth consecutive year at 716 MMT. The difference of 14.9 MMT in 2016/17 is down 44 percent from 2015/16.

With global supply and demand closer to equilibrium, albeit with abundant supply, weather news going forward will likely be the source of some price fluctuations. . Nearly all of the major winter wheat producing regions received adequate, or even excessive, moisture this year with the notable exception of India and Morocco. Reuters recently reported that a leading Indian agribusiness firm believes India’s 2016/17 wheat imports could jump to 5.0 MMT, compared to about 470,000 MT in 2015/16. USDA pegged Indian 2016/17 wheat production at 88.0 MMT, up slightly from 2015/16 production, but still 4 percent lower than the 5-year average.

USDA expects Moroccan wheat production will fall to 2.6 MMT, down 67 percent year over year. Reuters also reported that Moroccan officials will increase

22Rediscover RediscoverWH WHE AT | JULY 2016 22 E AT | JULY 2016

the soft (non-durum) wheat import tariff to 65 percent from 30 percent from June 15 to August 15 to protect the local harvest.

Due to the lower domestic production, Morocco will import 5.5 MMT of wheat in 2016/17, up 17 percent from 2015/16, according to USDA. In Russia and France, yieldenhancing rains are also causing concern about quality. France, the European Union’s top wheat producing country, received more than double its seasonal average rain in May according to Meteo France. On June 9, FranceAgriMer rated 75 percent of French soft wheat in good or excellent condition, down from 79 percent the prior week. Strategie Grains forecast French wheat production at 39.3 MMT on May 19, down 3 percent from 2015/16.

While plentiful rains boosted yield potential in Russian wheat, agricultural consultancy IKAR noted the rain could also affect crop quality. IKAR expects Russian wheat production to reach a record 64.5 MMT, up from its May estimate of 63.5 MMT. May was also a rainy month for wheat in the United States.

It has delayed harvest in the southern Great Plains, but favorable weather so far in June is allowing farmers to make better progress. On June 13, USDA reported winter wheat harvest at 11 percent complete, behind the 5-year average pace of 18 percent complete on the same date. USDA rated 61 percent of the U.S. winter wheat crop as good to excellent, down one percentage point from the prior week. USDA rated 9 percent of the crop as poor or very

poor, up one percentage point week-over-week. USDA rated 79 percent of the spring wheat crop in good to excellent condition, on par with wheat conditions at the same time last year and unchanged from the prior week.

USDA increased its forecast for U.S. production to an estimated 56.5 MMT, up one percent from 2015/16. The agency also expects total U.S. supply to climb9 percent to 83.2 MMT, buoyed by the larger production and larger beginning stocks. Beginning stocks totaled 26.7 MMT, up 30 percent year-over-year, and the largest beginning stocks since 1988/89.

countries around the world to hear updates on production prospects and discuss major issues facing the grain trade.

One of the biggest shifts in the world wheat market in the last 15 years has been the emergence of Russia as a major wheat exporter, averaging 17.9 MMT from 2011/12 to 2015/16. With that growth, Russia has become a primary supplier of wheat to price-sensitive markets across the Middle East and North Africa, displacing other traditional suppliers including the United States, Canada and the European Union (EU).

By Dalton Henry, USW Director of Policy

USW has narrowed its activities in markets now served mainly by Black Sea suppliers but increased its resources in growing qualitysensitive markets, primarily in Southeast Asia and Latin America. An increasing majority of flour millers and wheat food processors in those markets see wheat as a food ingredient with specific value, rather than as a bulk commodity sourced merely on price. Connecting with these new markets provides more value for overseas customers and, in turn, helps U.S. farmers capture more revenue per acre for the high-quality wheat they produce.

USW President Alan Tracy joined the International Grains Council (IGC) for their 25th annual conference June 14 to present an overview of changes in global wheat trade, trade distorting government policies and the United States’ shift to quality-based wheat markets.

More than 200 attendees at the conference in London, United Kingdom, came from grain importing and exporting

Tracy also discussed government policies that distort trade. Reflecting on previous IGC meetings, he recalled long-past discussions on the harm caused by rival country export subsidy programs — which are largely no longer in use. Today, instead of export subsidies, the biggest market distortion comes from domestic support programs, primarily in several advanced developing countries.

With winter wheat harvest underway, weather is still a concern across the wheat growing regions, and U.S. futures markets will react to weather news until the wheat is safely in the bin. To see the latest WASDE supply and demand presentation, visit http:// www.uswheat.org/supplyDemand/ doc/DF01158B3B65AFDF8525 7FCE00759D13/$File/S&D%20 160610.pdf?OpenElement.

USW Discusses Changes in Global Wheat Trade

Every WTO member country has agreed to specific limits and rules on agricultural support programs. However, many countries exceed those limits and fail to report their programs accurately. When an importing country provides a government support price above world market prices, they encourage domestic production. That offsets imports to the detriment of the global trading system and to farmers in other countries.

USW has spent the last five years documenting and quantifying the effects from these programs. The forum presented an ideal place to share and discuss the data as out-of-compliance programs not only harm the United States, but also exporters around the world.

Building Value in U.S. Wheat through Quality Improvement The basis for the U.S. wheat industry’s position as the world’s most reliable supplier extends far beyond having highly efficient grain production, transportation and inspection systems.

“U.S. wheat offers excellent value to our overseas buyers and their customers,” said Steve Wirsching, USW Vice President and West Coast Office Director.

“That value comes from a unique combination of quality, price and service — with quality being one of the most important benefits.”

U.S. wheat producers and a range of public and private wheat industry organizations including USW are making substantial investments in continually improving milling and baking quality in high-yielding wheat varieties. The following programs Rediscover RediscoverWH WHEEAT AT| |JULY JULY2016 2016 23 23

focus on enhancing wheat quality that is so important to the U.S. wheat value and reliability proposition.

The Wheat Quality Council cooperates with USDA Agricultural Research Service (ARS) wheat quality laboratories to connect wheat breeders with U.S. millers and bakers to test and share varietal quality information at an annual meeting.

The Wheat Quality Council also sponsors annual tours of hard red winter (HRW) and hard red spring (HRS) production in the field. This first-hand experience offers an important early look at the U.S. crops and the chance to network with wheat industry experts. More information is available on the Council Web site at wheatqualitycouncil.org.

For many years, USW has operated an Overseas Varietal Analysis (OVA) program designed to give U.S. wheat breeders insight to meet the quality needs of international customers. “OVA has closely coordinated with the Wheat Quality Council program,” said Wirsching. “Breeders submit varieties to ARS labs, and USW distributes samples to buyers for analysis. We appreciate the commitment those cooperators have shown over the years, which demonstrates the value of the effort.” USW distributes results by class to customers and is now bringing long-term cooperators to the United States to meet with breeders, quality specialists and state wheat commissions at byclass OVA Technical Conferences like the recent HRW conference in Hays, KS. “The face-to-face experience adds strength and impact to the effort,” Wirsching said. USW is currently reviewing 24Rediscover RediscoverWH WH E AT| JULY | JULY 2016 24 E AT 2016

the OVA program and discussing ways to make it even more effective.

USW also sponsors occasional Wheat Quality Improvement Teams of U.S. breeders and wheat quality specialists to visit overseas customers. Teams have visited Asia, Europe and Latin America, and breeders have reported that they have adjusted their breeding targets to reflect the concerns of overseas customers.

The quality preference and varietal data gathered from customers helped provide the basis for Wheat Class Quality Targets developed by Wheat Quality Council committees and U.S. wheat class organizations.

The targets are a useful tool for breeders and producers, and help promote U.S. wheat around the world. Quality targets are now in place for five of the six U.S. wheat classes. In addition, several wheat-producing states publish recommended variety lists, based on multi-year varietal quality data and quality targets, to encourage seeding of higher quality varieties.

Finally, USW reports extensively to customers on annual harvest and export quality by class, protein and port regions through its published Crop Quality Report and at its annual series of Crop Quality Seminars. State wheat commissions and class-specific organizations such as Plains Grains, Inc., are essential to the quality reporting effort each year and publish more detailed regional class-specific quality reports. .

“U.S. wheat producers recognize the critical nature of quality in assuring value to both domestic and export markets,” Wirsching

says. “The considerable efforts to improve quality are helping assure that superior value will always be a good reason to buy U.S. wheat.”

Conference Bringing Buyers Together at Just the Right Time

By Steve Mercer, USW Vice President of Communications USW is excited to welcome wheat buyers from the Americas to Portland, OR, the week of June 20, 2016, for a Latin American and Caribbean Buyers Conference.

Several circumstances are coming together to attract a record number of buyers from 15 countries, and as we start the new 2016/17 marketing year (June to May), the timing of the conference is ideal.

“The buyers who accepted our invitation represent nearly every major milling and importing group in two USW marketing regions that make up about 40 percent of total U.S. wheat exports,” said USW Vice President of Overseas Operations Vince Peterson. “This is, quite literally, an all-star team of buyers who are going to be in the right place at the right time for their business and for U.S. wheat.”

The challenges of record world wheat production for U.S. farmers is also an opportunity for wheat buyers. The United States is carrying abundant stocks into 2016/17, and the quality, especially of HRW and HRS, is excellent. At the same time, the export price spread between U.S. and most competing supplies has narrowed significantly. Peterson also noted that there probably is a floor for U.S. prices.

“Since the second half of 2015/16, hard red winter futures prices have tested and bounced several times off the ten-year price floor of about $4.40 per bushel,” he said. “Carry in is quite large, but they have been this large before. At the start of 2010/11 for example, we carried in 26.6 million metric tons, and Kansas City July wheat futures prices hit $4.50 per bushel before bouncing back up in part because Russia had a supply disruption. Can something happen that might be more bearish? Yes, but the production and consumption outlook is balanced for the first time in four years, so there is reason to think buyers are looking at the best U.S. wheat value right now.”

Brazilian wheat buyers have a real incentive to look at U.S. HRW now because both the supply of milling quality wheat from Argentina and the Brazilian domestic crop are down. They will be particularly interested in presentations on HRW quality, value and supply at the conference in Portland. Representatives from state wheat commissions and private exporters will also review quality and supply factors for HRS, soft red winter (SRW), soft white (SW) and durum at the event.

The conference agenda includes topics that extend the trade service and technical support USW representatives offer locally to customers, including supply chain logistics, flour blending and ideas on how to increase endproduct value.

“Even though consumer tastes are changing, prices are volatile and trade policies are

uncertain, we believe there is great opportunity ahead for our customers to grow their businesses,” said USW President Alan Tracy. “This conference will give them new insight and help them build stronger relationships with their reliable U.S. wheat industry partners.”

a strong role for agriculture in international trade and food security. Topics include trade policy and barriers — such as current work on TPP and Cuba — as well as innovation, research and technology, global food security, opening new markets and rural development.

USW thanks the organizations that made this conference possible, including Washington Grain Commission, Oregon Wheat Commission, North Dakota Wheat Commission, Colorado Wheat Administrative Committee, Texas Wheat Commission, Montana Wheat and Barley Committee, Maryland Grain Producers Utilization Board, Nebraska Wheat Board and USDA’s Foreign Agricultural Service.

The U.S. wheat industry depends on trade. Each year approximately 50 percent of the harvested crop is available for export. USW represents U.S. wheat farmers in overseas markets by providing trade servicing and technical assistance to train millers and end-product manufacturers about the benefits of U.S. wheat quality, value and reliability. USW provides objective, transparent information, facilitates communication between the exporting and importing industries, helps to resolve plant safety and wheat quality issues and works with governments to lower trade barriers. Overseas staff have their fingers on the pulses of these markets and can help farmers adjust to economic, demographic and demand shifts.

USDA Celebrates Trade Month

By Amanda J. Spoo, USW Communications Specialist Throughout June, USDA is celebrating “Trade Month” by highlighting its success in expanding markets and agricultural exports through trade and collaboration with partners like USW. The highlights include launching a new chapter of the USDA Results project, a year-long communications effort focused on the positive impact USDA programs have on the U.S. agriculture industry and those living, working and raising families in rural America.

The new chapter, “As Ag Exports Dominate, America’s Rural Communities Benefit,” focuses on the many ways U.S. agricultural exports have served as a bright spot for U.S economy and how the USDA has promoted

None this would be possible without the support of USDA Foreign Agricultural Service (FAS) market development programs such as the Market Access Program (MAP) and the Foreign Market Development program (FMD). These programs provide benefits to the entire agricultural supply chain, from wheat farmers and country elevators to the dock workers loading vessels for export and beyond to overseas millers and wheat food processors.

The month-long celebration Rediscover E EATAT| JULY 2016 RediscoverWH WH | JULY 201625 25

utilizes the news platform Medium and various social media outlets to share resources and graphics on these topics and their positive impact of U.S. agricultural exports. Additional resources include articles such as, 22 Facts You May Not Have Known About Trade, and audio interviews such as with Dr. Rob Bertram, chief scientist in USAID’s Bureau for Food Security, on Feed the Future.

Join USW and USDA in celebrating Trade Month on social media by following the hashtag #USDAResults. For more information and to access these resources, visit https://medium. com/usda-results/http-bit-lyresults-ch6-2d1cd30281cc.

Wheat Industry News Wheat Sequencing Consortium Releases Key Resource to the Scientific Community. Following the January 2016 announcement of the production of a whole genome assembly for bread wheat, the International Wheat Genome Sequencing Consortium (IWGSC) has completed quality control and is now making this resource available to wheat breeders and scientists around the world. The consortium said the dataset will help accelerate crop improvement programs and wheat genomics research to produce improved wheat varieties for farmers and their customers. The Kansas Wheat Commission and Kansas State University (KSU) provided funding for this project co-led

by Jesse Poland, KSU assistant professor in plant pathology. Read the full announcement at http:// www.wheatgenome.org/News/ Press-releases/Wheat-Sequencing26 Rediscover RediscoverWH WHE AT | JULY 2016 26 E AT | JULY 2016

Consortium-Releases-KeyResource-to-the-ScientificCommunity Wheat Foods Council Publishes June Issue of Kernels.

Each month, Wheat Foods Council publishes an online magazine providing science-based information on wheat and wheat foods nutrition. This month’s issue features highlight such as “The Truth About Wheat Lies in the Seed” by Brett Carver, Oklahoma State University wheat breeder and a feature story on AIB International, “Where Baking Science Begins.” Read full issue at http://www.wheatfoods.org/sites/ default/files/Kernels_June2016_ FINAL.pdf.

Good Start for HRS. North Dakota Wheat Commission reported that as of June 12, HRS conditions remained stable with 79 percent of the crop rated as good to excellent with a range from 68 percent good to excellent in Minnesota and South Dakota to 85 percent good to excellent in North Dakota. The northern tier of the region received precipitation over the last week which was mostly beneficial for crops, but most of the southern tier did not and some areas are becoming abnormally dry. That includes some durum producing regions, but for the most part the northern durum crop is faring well. Read more at http://www. ndwheat.com/buyers/default. asp?ID=285.

IGP Institute Risk Management Short Course.

This course, scheduled for Aug. 1 to 5, 2016, at the IGP Institute Conference Center in Manhattan, KS, focuses on principles of risk management and commodity

price control. The course includes basic and advanced sections on why, when and how to trade commodity futures and options.

For more information and registration, visit www.grains.kstate.edu/igp/.

Subscribe to USW Reports.

USW has added a “Subscribe” menu at www.uswheat.org where visitors may subscribe to this newsletter, the weekly Price Report and the weekly Harvest Report (available May to October.)

Subscribe at http://www.uswheat. org/subscribe1.

Follow USW Online. Visit our page at www.facebook.com/ uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter. com/uswheatassoc, additional photos at www.flickr.com/ photos/uswheat, plus video stories at www.youtube.com/ uswheatassociates.

June 30, 2016 USDA Expects Improved Yields Will Offset Decline in U.S. Planted Wheat Area

By Stephanie Bryant-Erdmann, USW Market Analyst U.S. farmers responded to market signals and planted the fewest acres to wheat since the early 1970s according to USDA’s June 30 Acreage Report. However, the 2016/17 yield potential is high with nearly every region in the United States experiencing favorable weather conditions.

USDA projects total average yields at 48.6 bu/ac or 3.3 metric tons per hectare up from 43.6 bu/ac last year and 8 percent above the 5-year average.

As of June 30, USDA estimated total area planted to wheat would reach 50.8 million acres, which is 9 percent lower than the 5-year average. USDA expects 2016/17 harvested area to drop 6 percent from both last year and the 5-year average to 44.1 million acres.

June 27, harvest was 58 percent complete in Kansas, ahead of 50 percent complete at this time in the 2015 harvest. Texas and Oklahoma harvest is nearly complete, and custom harvesters began test cutting along the Kansas-Nebraska border.

USDA estimates farmers planted 36.5 million acres of winter wheat for the 2016/17 harvest, up slightly from the March estimate. Rain last fall that delayed soybean harvest prevented some wheat seeding last fall, but low farm gate prices also contributed to the winter wheat planted area decline.

In contrast to recent years, soft red winter (SRW) harvest in the U.S. Southern Plains is progressing rapidly with good harvest conditions. As of June 27, harvest in Illinois was 76 percent complete compared to 45 percent complete last year with wheat in the largest SRWgrowing state rated at 70 percent good to excellent. That is way up from 37 percent good to excellent on the same date in 2015. USDA estimates total 2016/17 SRW area at 6.58 million acres, 7 percent lower than 2015/16 and 20 percent below the 5-year average.

The winter wheat crop went into winter dormancy in good or above average condition but limited snow cover left the crop vulnerable to cold temperatures.

However, a mild winter and early spring allowed winter wheat to emerge from dormancy in better than normal condition and beneficial spring rains further improved yield potential. As of June 27, USDA rated 62 percent of winter wheat in good or excellent condition, up from 41 percent last year at this time. USDA rated just 9 percent of the winter crop as poor or very poor, down from 23 percent in 2015.

USDA assessed hard red winter (HRW) planted area at 26.5 million acres, down 9 percent from 2015, and unchanged from the March estimate. While, a record-warm December and above average rainfall boosted yield potential significantly, heavy May rains caused flooding in parts of Texas and Oklahoma.

Harvested area in top HRWproducers Texas, Oklahoma and Kansas is projected to fall 12 percent year over year. As of

White wheat planted area increased slightly year over year according to USDA. White wheat planted area is forecast at 4.15 million acres. Idaho, Oregon and Washington, which produce most of the exportable U.S. white wheat were in the third year of drought during fall planting. However, December brought much needed precipitation to the region, and timely rains have continued to boost yield potential across the Pacific Northwest. With the adequate soil moisture, white wheat protein is expected to return to a more normal, lower range in 2016/17.

Hard red spring (HRS) planting finished well ahead of normal this year in most areas due to the early spring. USDA estimates farmers planted 11.4 million acres to HRS, up slightly from USDA’s

March estimate but 9 percent below 2015/16 levels. As of June 27, 72 percent of the spring crop was rated good or excellent and just 5 percent was poor or very poor. In North Dakota, the largest HRS producing state, 78 percent of the crop is in good or excellent condition. According to USDA’s weekly crop progress report, 56 percent of spring wheat was headed as of June 27, compared to the 5-year average of 27 percent, indicating that the HRS crop is developing faster than normal.

Durum acreage increased again this year as farmers responded to higher prices. Northern durum is grown primarily in two regions of North Dakota and Montana. Desert Durum ÂŽ harvest is underway in Arizona and California. As of June 27, wheat harvest in Arizona was 96 percent complete compared to the 5-year average of 88 percent complete on the same date.

California harvest is also ahead of schedule with USDA reporting 88 percent completion compared to 71 percent complete this time last year. USDA estimates 2.14 million acres were planted to durum, up 11 percent from 2015/16 but still 5 percent below the 5-year average of 2.26 million acres.

The industry will next turn toward USDA for its first by-class production estimates on July 12.

Brazilian Flour Millers Discuss Trade Policy with USW, U.S. Officials

By Dalton Henry, USW Director of Policy An old adage suggests that two of the biggest influences on a market are weather and governments. Though there is not Rediscover WHE AT | JULY 2016 27

much that USW can do about the weather, government policies are one key area where we can work with our customers to help achieve beneficial outcomes for both. A leading example of that cooperative work was on display as two Brazilian flour millers joined USW staff in a series of meetings in Washington, DC, in hopes of securing more favorable access to U.S. wheat supplies.

Brazil is an agricultural powerhouse, and one of the world’s largest exporters of agricultural commodities.

In addition to well-known production success in corn and soybeans, Brazilian farmers also produce between five and six million tons of wheat annually — about half of the 10 million metric tons (MMT) of wheat the Brazilian people consume each year. That leaves Brazilian flour mills in need of significant wheat imports each year.

The relationship between the U.S. wheat and Brazilian milling industries goes back several decades. In the 1980s, Brazil was a regular and large customer of U.S. supplies, purchasing between two and three MMT annually. The 1990s brought the formation of the Southern Common Market or Mercosur trading bloc, allowing wheat from Argentina to enter Brazil duty-free and leading to a subsequent decline in imports from the United States. During that time, Brazil agreed to a 750,000 metric tons (MT) zeroduty tariff rate quota (TRQ), allowing Brazilian millers access to a dedicated amount of wheat from the United States, Canada and other world suppliers on an even basis with Argentine 28Rediscover RediscoverWH WH E AT| JUNE | JULY 2016 28 E AT 2016

wheat. Unfortunately, Brazil never implemented that TRQ and negotiations on a replacement for it remain open today.

Resolution of the outstanding TRQ could prove to be a win-win scenario for U.S. wheat producers and their Brazilian customers.

Current discussions focus on applying a TRQ that will provide Brazilian millers more favorable access to world wheat supplies, while not directly displacing Brazilian wheat production.

The long-outstanding Brazilian wheat TRQ is a prime example that for markets to work we must have the right policies in place and we must collaborate with our customers around the world to influence those policies. USW will continue to seek the best possible outcomes when government policies hinder access to U.S. wheat supplies.

U.S. Wheat Associates Headquarters Welcomes New Fiscal Officer USW welcomes Kurt Coppens to its Arlington, VA, headquarters office staff as fiscal officer effective July 5, 2016. In that position, Coppens will consolidate expenses for USW’s 15 foreign offices for USDA claims, perform internal auditing, prepare reconciliations and many other financial reporting tasks.

He will report to Kevin McGarry, USW vice president of finance.

“Kurt has a wide breadth of accounting experience and significant international exposure over more than 10 years. I think Kurt will add great value to USW

and I am excited to have him join the finance team,” said McGarry.

Most recently, Coppens was employed as an accounting manager at Agora, Inc., a specialty publishing house in Baltimore, MD. Prior to that, Coppens was an accounting manager at Agora’s office in Paris, France, from 2009 to 2011. In both positions, he managed company accounting practices, revised accounting systems and served as a liaison between the Baltimore headquarters and the French and Swiss offices.

Prior to 2009, Coppens worked for such international companies as BridgeStreet Corporate Housing Worldwide, Intelsat Global Service Corporation, NeuStar, Inc, and FaciliCom International.

Coppens holds a bachelor’s degree in business administration from George Washington University in Washington, DC, where he majored in finance and international business. He is fluent in French, and proficient in Dutch and German.

Wheat Buyers Conference Positions U.S. Wheat as an Exceptional Value USW and nine state wheat commissions hosted 75 flour millers and other buyers at a Latin American and Caribbean Buyers Conference June 21 to 24, 2016, in Portland, OR. USW President Alan Tracy said the information at the conference was specifically selected and timed to emphasize the excellent value of U.S. wheat for these buyers from 16 countries.

Tracy noted that several speakers at the conference focused on how current world market dynamics make U.S. wheat an attractive choice for importers.

That is an important message for Latin American buyers who import 40 percent of all U.S. wheat exports and are working to serve the increasing demands for new and better wheat food products in the region. He said these markets increasingly buy on the basis of the quality characteristics U.S. wheat farmers produce every year to help meet the growing demand.

As just one example from the conference, Kansas Wheat CEO Justin Gilpin gave an inside look at HRW and the increasing investment in innovation that farmers are leading. He told the buyers that farmers across the United States are leading the call for increased investment in wheat yield and functional quality.

Gilpin cited work at Heartland Plant Innovations, funded mostly

by Kansas farmers, which is already paying off for flour millers in new varieties with higher extraction rates.

Representing the Latin American marketing group from CHS Inc., Dan Barnard discussed how the current market gives HRW exceptional value. Referring to a 75 cents-per-bushel premium in mid-2017 futures prices, he told the buyers that they will have the best access to HRW at the least cost over the next three to four months. Speakers covering white wheat, HRS, SRW and durum shared very similar information.

According to USW Vice President of Operations Vince Peterson, there are more timeless

reasons why a large conference like this is worth the investment and effort.

Columbia Producers and the Padget Family hosted tours before and after the event.

“USW has held a Latin American conference every other year for nearly 25 years. With these buyers all in one place, the industry can talk in person about the markets and about how U.S. wheat fits into their businesses and that builds trusting relationships,� Peterson said.

World Food Prize Foundation Honors Work in Biofortication of Crops

German Zapata, a procurement manager with Servicios Nutresa in Colombia, agreed that traveling to the conference gave him and his colleagues the opportunity to consider U.S. wheat in a very different way. Standing on an Oregon farm after the conference, Zapata said it was amazing to experience the whole process of wheat production and marketing, seeing the land and the technology farmers have, and how they work to produce the best quality wheat.

To see presentation slides from all the speakers at the Latin American and Caribbean Buyers Conference, visit the USW website at http://bit.ly/295mVY8.

USW wants to thank these conference sponsors: Colorado Wheat Administrative Committee, Maryland Small Grains Utilization Board, Montana Wheat and Barley Committee, Nebraska Wheat Board, North Dakota Wheat Commission, Oregon Wheat Commission Texas Wheat Producers Board, Washington Grain Commission and the Foreign Agricultural Service of USDA. In addition, the Wheat Marketing Center, Columbia Grain, United Grain, Oregon Wheat Commission, Mid-

The 2016 World Food Prize, the most prominent global award for individuals whose breakthrough achievements alleviate hunger and promote global food security, was awarded to Drs. Maria Andrade, Robert Mwanga, Jan Low and Howarth Bouis for their vital work in biofortification of crops.

This year's $250,000 prize will be divided equally between the four recipients.

"These four extraordinary World Food Prize Laureates have proven that science matters, and that when matched with dedication, it can change people's lives," said U.S. Agency for International Development (USAID) Administrator Gayle Smith. "USAID and our Feed the Future partners are proud to join with renowned research organizations to support critical advances in global food security and nutrition."

Awarded by the World Food Prize Foundation, the $250,000 prize honors the Laureates' unparalleled achievement in countering world hunger and malnutrition through biofortification, the process of breeding critical vitamins and micronutrients into staple crops.

Drs. Andrade, Mwanga and Low of the International Potato Center (CIP), are being honored for developing the single most successful example of biofortification: the orange-fleshed sweet potato (OFSP). Dr. Andrade Rediscover WHE AT | JULY 2016 29

and Dr. Mwanga, plant scientists in Mozambique and Uganda, bred the Vitamin A-enriched OFSP using genetic material from CIP and other sources, while Dr. Low structured the nutrition studies and programs that convinced almost two million households in 10 separate African countries to break away from tradition and plant, purchase and consume this nutritionally fortified food.

event is the centerpiece of the Borlaug Dialogue, a three-day international symposium that regularly draws over 1,200 people from 60 countries to discuss cutting-edge issues in global food security. The Borlaug Dialogue tackles the complex interplay of areas that affect global food security efforts, from policy and trade to science and infrastructure.

Dr. Bouis, the founder of HarvestPlus at the International Food Policy Research Institute (IFPRI), pioneered the implementation of a multiinstitutional approach to biofortification as a global plant breeding strategy over a 25-year period. Because of his leadership, crops such as iron- and zincfortified wheat, beans, rice, and pearl millet, along with Vitamin A-enriched cassava, maize and OFSP are being tested or released in over 40 countries.

Conservation agriculture, biotechnology, advanced breeding and open, consistent trade flows are all necessary to fight the constant threat of food insecurity.

U.S. wheat farmers know that all of these topics will need attention if we are to sustainably feed the world population for generations to come. The World Food Prize, more than any other meeting or organization, celebrates this vital collaboration and recognizes pioneers and leaders in all of these fields. USW congratulates this year’s World Food Prize Laureates and thanks the World Food Prize for its continued devotion to recognizing leaders in the fight against hunger. As Dr. Borlaug said, “If you desire peace, cultivate justice, but at the same time, cultivate the fields to produce more bread; otherwise there will be no peace.”

Thanks to the combined efforts of the four Laureates, biofortified crops are positively affecting over 10 million people, with the potential of several hundred million more in the coming decades.

In announcing the names of the 2016 Laureates, Ambassador Kenneth M. Quinn, president of the World Food Prize, noted, "They are truly worthy to be named as the recipients of the award that Dr. Norman E. Borlaug created to be seen as the Nobel Prize for Food and Agriculture.”

This year is the 30th anniversary of the World Food Prize.

The honorees will receive the World Food Prize at a ceremony in the Iowa state capitol in Des Moines, Oct. 13, 2016. The 30Rediscover RediscoverWH WH E AT| JUNE | JULY 2016 30 E AT 2016

Visit http://www. worldfoodprize.org for more information.

Wheat Industry News Condolences. USW was saddened to learn that Fleur Noeth’s husband, Jim, recently lost his battle with lung cancer.

Fleur was with USW for 46 years and Jim will be remembered by many USW staff as friendly and a joy to be with. A memorial

video has been prepared by their son and can be viewed at https:// vimeo.com/171241632. Our thoughts are with Fleur and her family.

California Wheat Commission Selects Claudia Carter as its New Executive Director. Carter, originally from Manta, Ecuador, officially stepped into her role as the CWC’s executive director on June 20, 2016. Carter spent the past two years as the CWC’s lab director, focused on research, consulting and on-site training.

“Claudia has been doing a great job and we are pleased that she has accepted the position as the new Executive Director,” said Roy Motter, CWC chairman. “We are looking forward to her providing strong leadership for the wheat industry, with emphasis on market development, research and development of new and improved wheat varieties.”

PPO Traits May Become Common in Bread Wheat Varieties. Polyphenol oxidase (PPO) is an enzyme found in all plants that does not make food spoil, but simply diminishes its appeal. The Montana Wheat and Barley Committee has been working with Montana State University and the Agricultural Research Service’s Grain, Forage, and Bioenergy Research Unit in Lincoln, NE, for four years to pinpoint the major genes responsible for PPO activity in wheat and, ultimately, lessen or eliminate them. Researchers have now found null alleles that have no PPO activity, and show negligible wheat kernel PPO levels when combined. Read the full article at http://www. theprairiestar.com/news/crop/ researchers-hope-no-ppo-traits-

become-common-in-bread-wheat/ article_409c4fdc-3c9b-11e6-b8d9a7da5a350e33.html.

107 Nobel Laureates Sign Letter Blasting Greenpeace Over GMOs. More than 100 Nobel laureates have signed a letter urging Greenpeace to end its opposition to genetically modified organisms (GMOs). The letter asks Greenpeace to cease its efforts to block introduction of a genetically engineered strain of rice that supporters say could reduce Vitamin A deficiencies causing blindness and death in children in the developing world. Read the full article at https://www.washingtonpost. com/news/speaking-of-science/ wp/2016/06/29/more-than100-nobel-laureates-take-ongreenpeace-over-gmo-stance/.

Using Genomics to Predict Bread Quality and Accelerate Wheat Variety Development. A team of breeders and geneticists at Kansas State University and the International Maize and Wheat Improvement Center (CIMMYT), has come up with a new approach to determine if new varieties of bread wheat will have what it takes to make better bread.

With funding from the USAID Feed the Future Initiative, the team is using DNA markers to predict important quality traits for bread wheat, such as dough strength and loaf volume. Their work, "Genomic Selection for Processing and End-Use Quality Traits in the CIMMYT Spring Bread Wheat Breeding Program," was recently published in the journal “Plant Genome.” Read the full article at http://www.k-state. edu/media/newsreleases/jun16/ betterbread63016.html.

IGP Institute to Host BuhlerKSU Spanish Executive Milling Course. This course, scheduled for Aug. 22 to 26, 2016, at the IGP Institute Conference Center in Manhattan, KS, is designed as an introduction to flour milling and flour quality, grain cleaning and functionality. Course instructor, Jason Watt says the course is an asset for those wanting to broaden their knowledge of the flour milling industry. For more information and registration, visit www.grains.k-state.edu/igp/.

Subscribe to USW Reports.

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Follow USW Online. Visit our page at www.facebook. com/uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter. com/uswheatassoc, additional photos at www.flickr.com/ photos/uswheat, plus video stories at www.youtube.com/ uswheatassociates.

Rediscover E AT | JULY 2016 31 RediscoverWH WHE AT | JULY 2016 31

Maltby Market Analysis

by Dan Maltby

Hello Kansas Wheat. Happy 4 of July! th

Much of your winter wheat harvest is finished by now. The bad news is prices are low (horribly low), and have little chance of rallying appreciably in the next 60 days, and possibly have little chance of rallying in the next 60 weeks…a few weeks ago I said “one could build a good case for selling his new-crop wheat”.

That was almost a dollar ago, which is hard to believe.

The good news is MOST of you had better yields than “normal”. Just what is “normal” and how much better…is kindova personal thing, and I don’t like to be too nosy. Therefore…we will ultimately “go with” whatever numbers the USDA reports, and not what we’ve heard. In other words, will we use the reports of “+ 100 bu dryland” yields”? No, of course not. But did some of you guys actually hit that number?

Well…that’s a lot. Unfortunately, when we look at these posted bids, the conclusion is “you need a lot”.

Date

Dodge

Colby

Goodland

Protection

Scott City Sublette

07/01 06/24 06/17 06/10 Date 07/01 06/24 06/17 06/10 BASIS 07/01 06/24 06/17 06/10 Date 07/01 06/24 06/17 06/10

$2.92 $3.43 $3.81 $3.88 Concordia $3.17 $3.43 $3.81 $3.99 Dodge -120 -80 -80 -80 Concordia -95 -80 -80 -70

$2.97 $3.48 $3.86 $3.98 Salina $3.27-$3.27 $3.58-$3.63 $3.96-$4.01 $4.14-$4.14 Colby -115 -75 -75 -70 Salina -85, -85 -65, -60 -65, -60 -55, -55

$2.95 $3.43 $3.81 $3.93 Hutchinson $3.09-$3.39 $3.42-$3.68 $3.80-$4.06 $4.00-$4.19 Goodland -117 -80 -80 -75 Hutchinson -103, -73 -80, -55 -80, -55 -70, -50

$2.92 $3.38 $3.76 $3.93 Wichita $3.16-$3.27 $3.55-$3.64 $3.93-$4.02 $4.06-$4.24 Protection -120 -85 -85 -75 Wichita -96, -85 -68, -60 -68, -60 -63, -45

$2.99 $3.34 $3.72 $3.84 Ark City $3.09 $3.42 $3.80 $4.01 Scott City -113 -90 -90 -85 Ark City -103 -80 -80 -68

$3.02-$3.04 $3.41-$3.43 $3.79-$3.81 $3.88-$3.88

Sublette -110, -108 -82, -80 -82, -80 -80, -80

The bad news is the average Kansas price for wheat is $3.10/bu. That is almost exactly half of what I figure total cost of production is, based on 40 bu/ac yield. The good news is average yields are probably 10% higher than that. So if a guy grew 44 bu/ac wheat instead of 40 bu wheat, at today’s prices you grossed an additional $12.40/acre. Don’t spend it all at once.

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 #227 danmaltby.riskmgmt@gmail.com 07/01/16 pg. 1

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Some of you are hoping I am really wrong when I said “have little chance of rallying appreciably in the next 60 days, and possibly have little chance of rallying in the next 60 weeks…”

The USDA will soon (again) issue updated WASDE reports, incorporating the recently updated acreage report and the stocks-in-all-positions reports (issued last Thursday).

IF I pop all USA HRW yields up 10%, with the recent acreage reports, USA HRW wheat production might look like this: PRODUCTION KS CO NE OK TX SD ND MT CA total USA HRW % of USA HRW

production est.

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 380.0 291.2 283.8 356.0 369.6 360.0 276.5 378.0 321.1 246.4 321.9 427.7 52.8 39.9 94.0 57.0 98.0 105.8 78.0 73.8 40.8 89.3 79.2 97.9 68.6 61.2 84.3 73.5 76.8 64.1 65.3 53.3 39.9 71.1 46.0 66.0 128.0 81.6 98.0 166.5 77.0 120.9 70.4 154.8 105.4 47.6 98.8 127.1 96.0 33.6 140.6 99.0 61.3 127.5 49.4 96.0 68.2 67.5 106.5 98.6 65.6 41.4 95.0 104.0 64.3 63.7 66.8 60.5 26.1 59.4 42.7 64.7 11.1 7.9 22.3 22.6 26.2 17.6 13.9 40.2 8.6 27.2 8.4 8.0 94.5 82.6 83.2 94.4 89.5 93.6 89.8 84.6 81.7 91.8 91.0 108.9 21.6 14.5 19.2 34.0 26.4 28.8 35.7 26.4 27.6 15.2 10.5 14.1 918.2 653.9 920.4 1006.9 889.0 981.9 745.7 967.5 719.3 715.5 804.9 1,012.9 929.8 682.079 961.588 1035.24 919.939 1018 780 1000 747.4 738.7 826.9 1,031.50 98.8% 95.9% 95.7% 97.3% 96.6% 96.5% 95.6% 96.8% 96.2% 96.9% 97.3% 98.2%

Assuming spring wheat yields increase also, and demand stays the same…we’d be looking at an additional 207 million bu of all wheat production bushels, swelling the projected carryout on June 1,2017 to 1.257 billion bushels resulting in a huge stocks/usage ratio of 59%.

Ugh. (Wheat exports have been pretty good, theoretically offering the hope of increased demand, but it’s too early for the USDA to make a positive change.)

And if USA spring wheat yields are up 10%, better assume Canadian yield will be up 10%..., etc.

Thus we get a long term continuous wheat chart that plummets below $4.50, making a winter wheat farmer want to do something else for a living…

I’m not for sure where the next support line would be drawn…I had one on there at $3.30, but that seemed too depressing, so I took it off.

Yuk. Kansas Wheat market update #227 danmaltby.riskmgmt@gmail.com 07/01/16 pg. 2

Rediscover WHE AT | JULY 2016 33

World wheat weather, if anything, seems on maybe the “little too wet side”, rather than the “too dry” side, so it’s not improbable wheat yields everywhere will be raised in this coming July 12 report, or as the year progresses. We all know the world has plenty of wheat. IF total world wheat consumption doesn’t increase, then someone has to pay to store it. IF total wheat consumption does increase, it might very well be at a feed grain’s expense…and this chart of Dec corn is none too peppy. Yes, there were some opportunities to lay off some bushels. But I doubt everyone did.

Nasty 80c drop in 2 weeks…the next time you read something about how La Nina will be bullish, show ‘em this chart. Brexit didn’t help; neither did all that rain…neither did big wheat yields, etc.

Corn exports have been good, as have crude oil exports, and ethanol exports X the USA, but this corn market needs a little “hot and dry” pretty quick, as the USA corn crop will be mainly completely pollinated in the next 3 weeks, and once that’s happened, for the most part, yields are set.

I’m hesitant to show this Nov bean chart, as invariably some will say “beans will support corn”. Believe me, they will not.

Kansas Wheat market update #227 danmaltby.riskmgmt@gmail.com 07/01/16 pg. 3

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The Funds…have recently got creamed in corn. Their wheat shorts are working. They are lightening the load in soybeans. This table’s columns have been changed. N is history.

It is important to note the red font in corn. Funds are selling out their long positions. They are not short yet, but they have drastically reduced their long positions, and will continue to do so on new weakness.

A closing weekly low in beans below last week’s close ($10.79) will bring in noticeable bean selling, as that would be a 4-week closing low.

You can see wheat funds actually sold more wheat this week, and added to their winner. And they will CONTINUE to sell new lows.

CLOSE

KWU16

KWZ16

KWN17

CU16

CZ16

CN17

WU16

MWU16

MWZ16

SX16

07/01

$4.12

$4.36

$4.73

$3.60

$3.67

$3.86

$4.30

$5.00

$5.16

$11.38

06/24

$4.41

$4.57

$5.03

$3.89

$3.94

$4.09

$4.65

$5.27

$5.42

$10.79

06/17

$4.79

$5.03

$5.37

$4.43

$4.49

$4.55

$4.95

$5.49

$5.62

$11.48

06/11

$4.86

$5.10

$5.44

$4.28

$4.31

$4.41

$5.07

$5.47

$5.62

$11.63

06/03

$4.90

$5.13

$5.47

$4.20

$4.20

$4.32

$5.07

$5.48

$5.61

$10.85

05/27

$4.76

$4.99

$5.33

$4.14

$4.14

$4.24

$4.92

$5.36

$5.49

$10.56

05/20

$4.65

$4.89

$5.16

$3.97

$3.97

$4.13

$4.79

$5.35

$5.47

$10.50

05/13

$4.73

$4.97

$5.30

$3.93

$3.98

$4.14

$4.84

$5.42

$5.54

$10.55

05/06

$4.70

$4.95

$5.27

$3.80

$3.85

$4.05

$4.75

$5.43

$5.54

$10.22

04/29

$4.94

$5.18

$5.47

$3.92

$3.95

$4.10

$4.98

$5.55

$5.66

$10.08

04/22

$4.88

$5.10

$5.37

$3.76

$3.81

$3.97

$4.84

$5.43

$5.53

$9.83

04/15

$4.83

$5.04

$5.35

$3.82

$3.88

$4.07

$4.77

$5.36

$5.48

$9.67

On a final note, I saw there is a 91c/bu difference between 12% protein and 11% protein in the KC milling market. That is a VERY WIDE protein spread. IF you know you do have 12 protein new-crop wheat, if possible, try to point it towards the domestic milling market. To do that, you may have to store it yourself.

The export market may pay some premiums too, but much more reluctantly, and the cow…well, as far as he’s concerned, it all tastes the same.

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 #227 danmaltby.riskmgmt@gmail.com 07/01/16 pg. 4

Rediscover WHE AT | JULY 2016 35

Upcoming Events JULY 2016 • USW 2016 Summer Board Meeting, July 16 - July 21, Fargo, North Dakota

AUGUST 2016 • Joint KWC/KAWG Board Meeting, August 9, Wichita • KAWG annual membership meeting, August 10, 7 a.m., Consulate Room 1, DoubleTree by Hilton Hotel Wichita Airport, Wichita, Kansas • Wheat U, August 10, 8:30 a.m. 3:45 p.m., Wichita, Kansas. Visit wheatu.com for more information.