Rediscover Wheat - September 15

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

SEPTEMBER 2015

INSIDE THIS ISSUE Kansas State University 's leadership in wheat research recognized with $1.6 million grant Rediscover Wheat: Research Highlighted During the 2015 Kansas 4-H Wheat Expo Back to School: USDA projects bright future for agriculture students

Rediscover WHE AT | SEPTEMBER 2015 1

Volume 2 • Number 9 www.rediscoverwheat.org The official publication of

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

KAWG MEMBERSHIP $100 per year

EDITOR

Marsha Boswell • mboswell@kswheat.com

ASSISTANT EDITOR/DESIGNER

Audrey Schmitz • commintern@kswheat.com

CONTRIBUTORS

Julia Debes • jdebes@kswheat.com Jordan Hildebrand • jhildebrand@kswheat.com

CEO

Justin Gilpin • jgilpin@kswheat.com

KAWG OFFICERS PRESIDENT Michael Jordan • Beloit

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

KWC OFFICERS

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

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

Contents of this publication may not be reprinted without permission.

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In This Issue :

Recipe: Fresh Pecan Pie

Rediscover Wheat: Research Highlighted During the 2015 Kansas 4-H Wheat Expo Wheat Foods Council Wheat Farmers Take the Stage at 2015 Risk and Profit Conference Kansas State University 's leadership in wheat research recognized with $1.6 million grant Recipe: Healthy Additions Pancakes IGP Institute Stakeholders News Brief News from National Association of Wheat Growers News from U.S. Wheat Associates Maltby Market Analysis Upcoming Events

Fresh Peach Pie Directions

1. Prepare peach filling. In large bowl, stir together dry ingredients and mix lightly with sliced peaches.

2. For crust, combine all-purpose flour, white whole wheat flour and salt in mixing bowl. Using a pastry blender, or two knives, cut shortening into flour until it resembles small peas. Add half of ice water at a time and chase around the bowl with a fork, then add other half. Dough should cling together to form a ball.

3. Divide in half and form into flattened balls. Roll out one portion on floured surface to a circle

4. 1 ½ inches larger than inverted 9” pie pan. Fit loosely into pan. Fill with prepared peaches. Dot with butter.

5. Roll out remaining dough.

Cut in slits for escaping steam.

Place top crust over filling and trim ½” beyond rim of pan. Seal edge by folding top crust under bottom crust. Flute edge with fingers or tines of a fork. Brush top of pie with milk and a sprinkle of sugar.

6. Bake in preheated 450°F oven for 10 minutes, then 350°F for 30 to 35 minutes or until crust is nicely browned and juice begins to bubble through slits in crust.

Cool on rack before slicing.

Ingredients

Peach Filling: ½ cup granulated sugar ¼ cup brown sugar 3 tablespoons cornstarch or 2 tablespoons tapioca ½ teaspoon almond extract ¼ teaspoon each ground cinnamon and nutmeg, optional 4-5 cups peeled, sliced fresh peaches * 2 tablespoons butter or margarine Flaky Pastry for 2 crust pie: 1 ½ cups all-purpose flour ½ cup white whole wheat flour 1 teaspoon salt ¾ cup vegetable shortening 5-6 tablespoons ice water Milk and sprinkle of sugar, optional

Nutrition Information Nutrition Per Serving: (1 slice, 245 g): 650 calories, 22g fat, 5g fiber, 6g saturated fat, 0g trans fat, 102g carbohydrates, 8mg cholesterol, 298mg sodium, 11g protein, 6mg vitamin C, 5mg iron, 21mg calcium.

Yield: one 9” pie, 8 slices.

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Rediscover Wheat: Research Highlighted During the 2015 Kansas 4-H Wheat Expo amilies from as far as Johnson County hit the road to Hays on Thursday, August 6 to learn about wheat research at Kansas State University’s Agricultural Research Center in Hays. The annual Kansas 4-H Wheat Expo, previously known as the Kansas 4-H Wheat Show, also offered youth participants the chance to test their judging skills and compete in various wheat-focused events.

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Deryl Waldren, K-State Research and Extension northwest area extension specialist, helped organize the event in coordination with local extension agents and 4

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the Ag Research Center. He said the event, which focuses on wheat education, has been conducted every year since 1954. Kansas Wheat is a regular contributing sponsor for the event.

“The Wheat Expo is a fun, educational field day,” he said.

“And it is very easy to have wheatfocused activities here in Hays.”

The event cost just $5 to attend and the Market Wheat Show is open to all 4-H and FFA members.

This year’s participants brought 52 entries in categories from one quart jars of clean wheat, yeast rolls, cookies, wheat photography

and wheat educational displays.

Youth also could submit bin run samples from a 4-H wheat test plot or “adopt a producer” plot to the Kansas State University Milling and Baking Laboratory for analysis and judging. In addition to the exhibits, all participants could practice their judging skills by ranking classes of wheat, cookies and photography as well as identifying common weeds.

At the end of the day, judges for each category awarded not only ribbons, but also provided oral comments for each category – helping participants improve their projects for the next year.

Speak for Wheat spokesperson Anita DeWeese from Pratt said her family has attended the event for the last eight or nine years.

Her three children pick exhibits for their local fair that can also be brought to the Kansas 4-H Wheat Expo. This year that included samples from her son’s test plot, two displays, three wheat photographs and even some cookies and yeast rolls. But, she said the tours during the event are even more valuable than the judges’ feedback.

of the main research buildings and feedlot research areas as well as a visit to historic Fort Hays. Throughout the tour, Ag Research Center and extension staff highlighted possible future career choices for youth attendees in fields from genetics to milling.

The Kansas 4-H Wheat Expo rotates locations across the state, giving participants even more reasons to return year after year.

Watch the Kansas 4-H website next spring for information on next year’s event for your chance to rediscover wheat.

“The Wheat Expo is a good family event,” she said. “You get to explore some of the things you do not get to see on the farm.”

This year’s event featured tours of the Ag Research Center’s wheat breeding program.

Stops highlighted the color sorting technology used to help differentiate white wheat from red, how varieties are evaluated for milling and baking quality, the customized six-row planter and mini-combine used to harvest test plots and all the by-products made from wheat. In addition, participants took a quick tour Rediscover WHE AT | SEPTEMBER 2015 5

WFC Member Update - August 2015 President, Tim O’Connor toconnor@wheatfoods.org 303-229-9198

VP, Gayle Veum, RDN gveum@wheatfoods.org 970-275-4440

www.WheatFoods.org 51-D Red Fox Lane Ridgway, CO 81432

In this Issue: Generating the Buzz, Social Media Update, Contact Information for FY 2015-16 Executive Officers, Challenge from Nebraska Wheat Board and More...

Generating the Buzz The heat was on in August (and we’re not talking about the weather) as the WFC PR team ignited a number of program elements: The Need to Know: Working with national market research firm Wakefield Research, the k+m team developed and launched a survey of registered dietitians, medical doctors, and personal trainers, to find out their perceptions of wheat foods, how much they really know about them, and what they are telling their clients/patients about them from a health/nutrition standpoint. We’ll use the results in a number of ways throughout the coming year.

Going for Gold: In preparation for Michele Tuttle’s race to the finish line in the International Triathlete Union championships September 17-19, we developed our media plan and began pitching national and local regional outlets on coverage of the story. Michele continues to blog and tweet about her journey and the importance of wheat foods in her training so keep your eyes on the WFC website for the latest updates.

Telling It Like It Is: We’ve been busy in the editing room, reviewing all the video footage shot last month in Nebraska and picking the “cream of the crop” to create the WFC five-video series featuring farmers and their families speaking to influencers and consumers about what’s really involved in the wheat farming process and the important contribution wheat farmers are making to sustainability.

The videos will also inform and set the record straight about wheat breeding and nutrition issues like gluten.

Assembling Our Experts: The Food & Nutrition Conference (FNCE) of the Academy of Nutrition and Dietetics is about a month away so we’re finalizing plans. This year, we will have a wheat producer and baker and Michele Tuttle, MPH, RDN/triathlete as our guest experts in the booth. In addition, we are partnering with the Grain Foods Foundation to have Yanni Papanikolaou as an additional special guest prior to his presentation of the GFF poster session featuring new research on the positive contributions of grain foods to the diet.

Twitter.com/wheatfoods 28 posts 4 Retweets 3 Favorites 7 Mentions Reached (including shares) 13,040 Monthly growth from 1830-1859 12 month growth of 38.0%

Social Media Update

Facebook.com/wheatfoods 27 Posts 269 Likes 35 Shares Seen by 13,780 people Reached (including shares) 54,689 Monthly growth from 1223-1262 12 month growth of 37.9%

WFC Industry Engagement Recently Tim O’Connor, WFC President, gave a presentation about the WFC at the Oklahoma Wheat Review and met with the Oklahoma Wheat Commission Board. Tim and WFC Board Chairman Don Brown, Ardent Mills, traveled to Washington DC to meet with the North American Millers Association, National Pasta Association, American Bakers Association, the Grain Foods Foundation and the National Association of Wheat Growers to enhance WFC’s partnership with each organization and participated in a Grain Chain meeting discussing industry coordination on numerous initiatives. Tim also attended the Whole Grains Summit, the Florida Dietetic Association conference where WFC was an exhibitor and presenter and met with Ardent Mills management team and toured their Commerce City, CO, facility.

Tim has several trips planned to meet with industry groups in the near future and is very interested in attending your meetings to provide WFC update presentations and meet industry leaders and members. Please contact him by email phone2015 to schedule a visit with you soon: toconnor@wheatfoods.org or 303.229.9198.

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Contact Information

Challenge Issued!

Executive Officers: FY 2015-16

At the WFC June 2015 board meeting, Brent Robertson, past immediate chair of the Council, stated,

Don Brown, Ardent Mills - Chair Don.Brown@ArdentMills.com Debi Rogers, AIB International - Vice Chair drogers@aibonline.org Reid Christopherson, SD Wheat Commission - Secretary/Treasurer reid@SDWheat.org Erica Olson, ND Wheat Commission - Immediate Past Chair EOlson@ndwheat.com

WFC Staff Tim O’Connor, President toconnor@wheatfoods.org 303-229-9198 (direct line) Gayle Veum, RDN, Vice President gveum@wheatfoods.org 970-275-4440 (direct line and main office) FYI: W e are in the process of phasing out the WFC office landline. Our main office number will be 970-275-4440, which Gayle will answer. Please update your contact’s list to reflect this change.

Member’s Only Section You can find the “login” on the upper righthand corner of our homepage www.wheatfoods.org User name: WFNmember (case specific) Password: #wfnmember2013 (case specific)

On August 10, 2015, we had our k+m nutrition consultant Michele Tuttle, MPH, RDN write a response to Ben Greenfield’s article, “Four Fitness Foods You Should Avoid” that was posted on Aug. 6, 2015 on The Huffington Post’s Healthy Living Blog page.

Since this is such a widely read post, we felt it important to make the editor and writer aware of the misinformation about wheat contained in the article.

“The Nebraska Wheat Board would like to CHALLENGE all Wheat Foods Council Members to match their recently announced (this fiscal year) to be used for a WFC special project yet to be determined.”

Just to clarify, this money is in-addition to their voting member dues! Last fiscal year, the NWB contributed an additional $21,922 for a “special project” that k+m was tasked to complete. For this special project a video series was developed. Read more about the video series in “Generating the Buzz” on page 1 of this Update.) Robertson stated, “The video series was done with the intention that it would benefit all WFC members and not just the Nebraska Wheat Board and Nebraska wheat producers.” As the “Generating the Buzz” column on page 1 indicates the video series has been shot, is currently being edited and will be made available for WFC members’ use. Thank you to the Nebraska Wheat Board for funding this special project and for the generous contribution of the additional $50,000 for another special project to be developed in FY 2015-16.

Who is willing to meet the Nebraska Wheat Board’s Challenge?

Kernels the WFC’s E-Magazine Latest Issue: July 2015 If you missed reading it, you still have a chance. Find it at www.wheatfoods.org. At the bottom of the page click on the square labeled “Read Kernels” for this issue as well as access to previous issues. Be sure to share the “subscribe link” with board members, family, friends, co-workers, etc. We’d like to see our subscription numbers increase from 5,000 to 6,000 or more! http://wheatfoods.org/ subscribe. Please help us grow our readership by sharing the subscription link. Issues of Kernels are “free” to all!

A copy of the letter written by Ms. Tuttle is available by request. If you’d like a copy please let Gayle, gveum@wheatfoods.org know.

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Wheat Farmers Take the Stage at 2015 Risk & Profit Conference

By Julia Debes

Four Kansas wheat farmers took center stage during the 2015 Risk & Profit Conference August 20 to 21, 2015 to share stories of farming and farm policy with fellow producers, extension specialists and agricultural economists from across the state.

The Kansas State University Department of Agricultural Economics organized the annual conference, now in its 20th year, to provide agricultural decision makers with information on contemporary agricultural management topics.

Syracuse in the Spotlight Kansas Wheat Commissioner Jason Ochs from Syracuse answered questions from Eric Atkinson with the K-State Radio Network and conference attendees on August 20. Ochs talked about his nontraditional path back to the family farm, including an enlistment in the Army, working in financial services in Kansas and Colorado before moving home to Syracuse to work for Skyland Grain as an agronomy manager. In 2011, he started farming full-time with part-time assistance from his brother. To help finance newer equipment, advanced technology and land purchases, Ochs custom farmed for farmers as far as 60 miles away.

“For Hamilton County, I am an early adopter,” he said. “I have 8

Rediscover WHE AT | SEPTEMBER 2015

tried to keep things as lean as possible with as little debt as possible.”

Ochs described the remarkable reversal in rainfall in Hamilton County, reporting his farm has received 24 inches of rainfall in the last 12 months, compared to 12 inches total the prior three years. Despite additional rainfall, Ochs stated that just 30 percent of wheat acres in his area were harvested this year due to wheat streak mosaic virus. To make matters worse, some producers left wheat standing in the field as a cover crop. That could potentially affect next year’s crop.

Ochs said he joined organizations like the Kansas Association of Wheat Growers to help voice concerns on issues like disease management as well as keep track of legislation involving farm regulations.

Farm Bill and Foreign Policy Three other Kansas farmers participated in a post-lunch panel discussion on August 21, moderated by USDA Kansas Farm Service Agency (FSA) Executive Director Adrian Polansky: David Schemm, Sharon Springs; Paul Penner, Hillsboro; and Ron Suppes, Dighton.

Suppes, Kansas Wheat Commissioner and Kansas representative on the board of U.S. Wheat Associates, opened by urging producers to share how

farm programs benefit more than just the farm, but the entire rural economy around the farm and consumers themselves.

“We need to encourage people that in order to have a sustainable food program, you need a healthy farm economy,” Suppes said.

“Crop insurance is more of a rural sustainability assurance.”

Suppes also discussed the importance of the Market Access Program (MAP) and Foreign Market Development (FMD) program, two USDA efforts that match producer funding to promote U.S. exports overseas. Suppes said that more commodities are vying for the money in the highly effective programs, warranting an increase in funding.

Schemm continued the policy discussion by emphasizing the importance of working with other agricultural groups and influencers as the U.S. Congress prepares to position the next Farm Bill in 2018.

“We have to reach across the line and build those coalitions as we work towards the next Farm Bill,” Schemm said. “It is absolutely critical.”

Schemm said he will likely have a front row seat for those negotiations. He currently serves as treasurer of the National Association of Wheat Growers (NAWG), meaning he will still

be involved in leadership at the national level when the current Farm Bill programs expire.

Penner finished his term as NAWG president in March and now serves as immediate past president. He reiterated that national policy can have a large influence on returns home on the farm, especially when it comes to opening up new markets like Cuba.

and provided additional insight into how they have grown their operations and influence agricultural policy over time.

Ochs perhaps said it best when he emphasized that he would not trade the farm for his previous careers, even though the last few years have proven difficult.

“There is nothing like rural life,” he said. “The lifestyle is wonderful.”

For more information on the 2015 Risk & Profit Conference, visit http:// agmanager.info/events/risk_ profit/2015/default.asp.

“It is a real opportunity and it takes some real leadership to move forward on that issue,” he said.

Learn and Adapt All four Kansas wheat farmers embodied the key agricultural decision makers targeted by the conference. Each also answered questions from the audience

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Kansas State University's leadership in wheat research recognized with $1.6 million grant

By Lisa Borello ansas State University wheat researchers are leading efforts to develop a better understanding of the wheat genome.

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The National Science Foundation's Plant Genome Program awarded the researchers a three-year, $1.6 million grant to fund projects and collaborations to help train new generations to answer challenging plant genomics questions.

Jesse Poland, assistant professor of plant pathology and adjunct assistant professor of agronomy, is the principal investigator of the project "GPF-PG: Genome Structure and Diversity of Wheat and Its Wild Relatives."

The project will focus on ways to improve the current wheat genome assembly by using genetic information. Currently, the use of molecular markers in wheat breeding is limited because of their size, which is five times larger than the human genome.

"If we think about the genome as a book, with lots of letters that need to be organized into words and sentences and ordered pages that make a story, we are at the point with the wheat genome of having sentences organized on a page, but not clear what order the pages should go," Poland said. "To really understand the whole story, we need to get the pages in order."

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The project has the support of Kansas Wheat.

"Wheat farmers are excited about the work going on at Kansas State University and the advances that this project will mean to wheat genetics and leveraging diversity," said Justin Gilpin, CEO of Kansas Wheat. "It takes resources from important agencies like the National Science Foundation to support high-level institutions like Kansas State University that will really make a difference."

The project also will partner with the Kansas Foundation for Ag in the Classroom to develop education and training opportunities for future researchers. Kindergarten through 12th grades will receive information for plant science careers. Undergraduate students and postdoctoral researchers also will have education and training in genomics and bioinformatics.

Poland said that with the generation of huge datasets, the computational approaches of bioinformatics to understand biological data are critical.

"The goal is to integrate more computer science into agriculture classrooms. Since data sets have grown larger, good levels of computer skills are needed," he said.

"Wheat continues to be a strategic focus within the College of Agriculture and across K-State Research and Extension," said Ernest Minton, associate dean for research and graduate programs in the College of Agriculture at Kansas State University, and associate director, research, for K-State Research and Extension.

"We are very pleased that the work of Dr. Poland and colleagues was recognized as a priority for funding from the National Science Foundation."

Co-principal investigators of the project include Bikram Gill, university distinguished professor of plant pathology at Kansas State University; Sunish Sehgal, assistant professor at South Dakota State University; and Gary Muehlbauer, professor of agronomy and plant genetics department at the University of Minnesota-Twin Cities.

For more information on Poland's research and lab members visit the Wheat Genetics lab page at http://www. wheatgenetics.org/.

Healthy Addition Pancakes Ingredients 1 cup old-fashioned or quickcooking rolled oats ½ cup whole wheat flour ½ cup all-purpose flour 2 tablespoons milled flax seed or chia seed 1 tablespoon granulated sugar 1½ teaspoons baking powder ½ teaspoon baking soda 1 cup vanilla almond milk or 2% low-fat milk 2 large eggs, beaten ¼ cup unsweetened applesauce

Directions

1. In large mixing bowl, mix together oats, whole wheat flour, all-purpose flour, flax seed or chia seed, sugar, baking powder and baking soda.

2. Beat in milk, eggs and applesauce just until combined.

3. Grease heated griddle if necessary. (To test griddle, sprinkle with few drops water. If bubbles skitter around, heat is just right.)

4. Pour about ¼ cup batter for each pancake onto hot griddle.

Cook pancakes until puffed and dry around edges. Turn and cook other sides until golden brown.

Nutrition Information

To keep pancakes hot, stack on hot plate with paper towels in between; place on cookie sheet in 250°F oven. Pancakes may be placed on a wire rack to cool; packaged and frozen.

Great served with applesauce or peanut butter.

1 pancake provides approximately: 93 calories; 3 g protein; 16 g carbohydrates; 2 g dietary fiber; 2 g fat (0 g saturated); 31 mg cholesterol; 16 mg folate; 1 mg iron; 132 mg sodium.

Microwave Reheat Directions:

Yield: Makes about 12 (4-inch) pancakes.

1 pancake: 20-30 seconds if at room temperature, 35-45 seconds if frozen 2 pancakes: 35-45 seconds if at room temperature, 1-1½ minutes if frozen

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August 2015

STAKEHOLDER NEWS BRIEF Moving the Mission The IGP Institute faculty and staff hosted 168 participants from 22 countries in seven on-site courses and 15 domestic distance education participants in the month of August.

Here is a quick recap.

Jay O’Neil hosted a group of Japanese sorghum buyers from Agrex. He gave a presentation on U.S. and World Grain markets prices to a visiting group of Australian farmers.

He also conducted a China Risk Management course for USSEC, where 17 of the largest Chinese soybean importers participated.

Brandi Miller

Carlos Campabadal conducted the RAPCO Feed Manufacturing course for 30 Latin American participants.

This course was set up as a blended-learning course, where participants participated in lectures via distance prior to arriving. This allowed course participants more time for hands-on workshops focusing on feed processing. They also enjoyed a visit from Kansas Soybean Commission’s Emerging Leaders Class of 2015.

It was a great opportunity for the RAPCO visitors to ask questions of Kansas soybean producers. Finishing

Paul Alberghine

the month, Carlos coordinated the AFIA–NGFA–KSU Establishing HACCP for the Feed Industry training.

Jay and Carlos also hosted a USDA Cochran Fellowship group of six individuals from Malaysia. The group was interested in grain management for feed and milling.

Their two-week stay included a trip to New Orleans to visit an ADM export facility as well as stops at Cargill and Thionville Laboratories.

Mark Fowler also had an active month, hosting a group of USDA–Kansas City Commodity Office professionals.

The group spent time in both the Hal Ross and Shellenberger mills.

In addition, grain science faculty members Sajid Alavi and Greg Aldrich hosted trainings and events at the IGP Institute. Sajid’s Extrusion Processing course covering technology and commercialization welcomed 30 industry professionals. Many of those professionals came a day early to participate in the Pet Food workshop led by Greg Aldrich. Sajid also hosted a three-day interactive workshop in partnership with USDA exploring the topic of fortified rice.

Brandi Miller IGP Institute Assistant Director

In the Spotlight

Trainings and Activities

• Program Specialist in Health and Nutrition at USDA’s Foreign Agricultural Service

Courses and activities held in August.

• Extrusion Processing: Technology and Commercialization

• Native of Toronto, Canada and now resides in Forest Glen, Maryland.

• USDA–KCCO Flour Milling

“The K-State Grain Science Department is the leader in this field and the partnership between USDA and K-State is huge.”

• Extrusion-based Rice Fortification Workshop

• RAPCO Feed Manufacturing • Grain Management for Feed and Milling for Malaysia through the Cochran Fellowship Program • USSEC China U.S. Soybean Market Overview • AFIA 500 – Fundamentals of Feed Manufacturing

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Rediscover WH | SEPTEMBER 2015 1980E AT 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

As part of a three-day interactive workshop for extrusionbased rice fortification, participants were able to interact with industry professionals from Wenger Manufacturing.

Accolades

by Brandi Miller, IGP Institute Assistant Director IGP received two exciting announcements. The first was an announcement that Kansas State University, led by Carlos Campabadal, Cassie Jones and Charles Stark, would be a subcontractor in WISHH’s Assisting Management in the Poultry and Layer Industries by Feed Improvement and Efficiency Strategies in Ghana (AMPLIFIES Ghana). You can find more information about this project here.

Near and dear to my heart, the GEAPS/K-State Distance Education program received the University Professional and Continuing Education Association Central Region’s 2015 Celebration of Excellence Award for Innovative Noncredit Program. This award recognizes an outstanding new noncredit program which uses creative ideas in one or more areas or applies ideas in new ways, especially electronic modalities. It is always fantastic when the hard work invested by many is recognized.

The Cochran Malaysia Grain Management for Feed Milling participants visit Cargill’s Westwego port facility in New Orleans, Louisiana.

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 U.S. grain markets to visiting group of Australian farmers.

• Conducted a live radio interview on grain storage availability on RFD TV-Radio.

• Attended the GEAPS CEPOC meeting in Kansas City.

• Visited a grain export facility and FGIS in New Orleans.

• Hosted the Kansas Soybean Associations’ Emerging Leaders group.

• Attended the Continuing Education Program Oversight Committee Meeting in Kansas City.

• Attended an industry partnership meeting with GEAPS and IAOM.

Welcome Students We are excited to have an expanding team of student employees with us this year as we kick off the fall semester. The students represent a wide range of majors including agricultural communications and journalism, agribusiness, and family and consumer sciences education.

The students assist the staff with distance education tasks and communications projects as well as provide front office support.

Left to Right: Jackie Newland, Kelly Hannigan, Eryn Carter, Kylie Blythe, Katrina Polson, Cassidy Anderson and Melissa Grimmel.

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News from : NAWG Weekly Updates August 6, 2015 Internal Memos on Waters of the US Regulation Released The House Oversight & Government Reform Committee posted internal memos from the U.S. Army Corps of Engineers that express concern over the Environmental Protection Agency’s action on the Waters of the U.S. regulation. The documents, marked “Litigation Sensitive” show concern from within the Corps about the use of agency data and economic analysis in the final regulation. It is also clear from the information that the Corps was not consulted on many of the final decisions with Corps staff concerned about the final regulation being presented as a joint effort between the two agencies.

The memos also identify many questions from the Corps staff regarding the meaning of several terms and interpretation of the regulation. This information appears to contradict a memo from EPA Administrator Gina McCarthy and Assistant Secretary for the Army for Civil Works Jo-Ellen Darcy that the agencies will not be issuing formal guidance to agency employees 14 14

Rediscover WH 2015 WHEEAT AT || SEPTEMBER AUGUST 2015

on the implementation of the regulation, but instead will issue a question and answer document.

A copy of that memo can be found at http://www2.epa.gov/ sites/production/files/2015-07/ documents/clean_water_rule_ implemtation_memo.pdf.

The 12 lawsuits filed against the EPA and Army Corps have been consolidated into action in the 6th District Court in Ohio.

The regulation went into effect on August 28, and Congress has headed home for the August work period without taking action on efforts to stop the regulation.

Wheat growers are encouraged to express your concern over this regulation at any town hall or meetings with your Congressional Representatives during the August Recess.

Senate Committee Approves Pesticide Bill The Senate Environment and Public Works Committee approved S. 1500, the Sensible Environmental Protection Act of 2015. S. 1500 addresses duplicate regulation of pesticide applications, clarifying that the Federal Insecticide, Fungicide and Rodenticide Act is sufficient regulatory review of pesticides

and that Clean Water Act permits are not needed. Currently, certain pesticide applications require NPDES permits. NAWG supports S. 1500 and believes that all pesticide applications should be done in accordance with federal and state pesticide label requirement. The label is the law and wheat growers comply with label requirements. NAWG encourages continued action on this legislation in the Senate and House of Representatives.

Applications for 2015 WILOT Program Due Sept. 18 NWF is now accepting applications for the 19th Annual Wheat Industry Leaders of Tomorrow (WILOT) program, scheduled for November 14-19, 2015 in St. Louis, Mo. The WILOT program is an unique opportunity for 10 wheat growers to come together to hone and develop the skills necessary to become more involved in state grower associations and state wheat commissions. The NWF WILOT leadership development program is funded by NWF industry partner, Monsanto, and is held in St. Louis, Missouri.

In addition to the outstanding educational sessions, this program

also gives participants the opportunity to visit Monsanto labs and talk with researchers working on wheat innovation.

If interested in the program, growers should review and complete the application at http:// www.wheatfoundation.org/ wp-content/uploads/2012/10/ NWF-Leadership-TrainingApplication.pdf. All completed applications are due to Preston Millard (pmillard@wheatworld. org) by September 18, 2015. Read more at http://wheatfoundation. org/applications-for-2015-wilotprogram-due-sept-18/.

NAWG Attends Virginia Ag Expo The Virginia Grain Producers Association partnered with the Virginia Soybean Association, in cooperation with the Virginia Cooperative Extension Service, to host the annual Virginia Ag Expo at Brooke Farms near Locust Grove, Va. Brooke Farms is owned and operated by Bob and Missy Chambers, and is a 2,600 acre diversified operation where they raise corn, wheat, barley, soybeans, grain sorghum, straw, hay, as well as cattle and firewood. The Virginia Ag Expo is the largest one-day agricultural field day in Virginia, with over 150 exhibitors and sponsors.

NAWG staff attended the event, which included field tours and presentations by Virginia Cooperative Extension staff about new corn and soybean varieties, precision ag technologies and of the incorporation of sorghum into a double-cropping system.

More information about the event can be found at http://www. virginiagrains.com/agexpo/.

NAWG Attends USBCA Meeting NAWG joined other U.S. Biotech Crop Alliance members in Montreal, Canada for their annual meeting. Paul Penner, immediate Past President, attended with staff as USBCA discussed pressing issues in the biotech realm. The group reviewed current trends in global grain marketing, low level presence and regulatory constraints. NAWG is a member of USBCA and continues to support and contribute to their efforts to work on biotechnology issues within the supply chain.

Congress Takes Recess With the Senate officially in recess, Congress has started their annual month long recess. During the month of August members of Congress are heading home to visit with their constituents.

Town halls and other events will be held across the country.

NAWG encourages wheat growers to get out and engage with their Congressional delegation during this time. Be sure to visit the NAWG website to review the latest information about the issues affecting wheat growers today.

August 13, 2015 NWF Accepting Applications for Jerry Minore Memorial Scholarship The National Wheat Foundation (NWF) has partnered with BASF for the fourth consecutive year to award four students who have a personal connection to the wheat industry and a planned career path in agriculture the Jerry Minore Memorial Scholarship.

NWF is now accepting applications for the scholarship.

The Jerry Minore Memorial Scholarship honors both high school and college students who have demonstrated success in academics and leadership roles.

The scholarship is named in honor of Jerry Minore, a longtime friend of and an active participant in the wheat industry. In his role as BASF senior market manager, Minore was a liaison to the wheat industry, including the NWF and the National Association of Wheat Growers (NAWG). Minore, who passed away in February 2012, was a true advocate for wheat growers. To honor Jerry’s life and work, the Minore Memorial Scholarship will fund two $1,500 scholarships and two $1,000 scholarships for the 20162017 academic year.

All applications must be postmarked on or before December 11, 2015. Applications can be emailed to PMillard@wheatworld. org. The scholarships will be awarded at the 2016 Commodity Classic in New Orleans, La. Visit http://wheatfoundation.org/wpcontent/uploads/2015/08/JerryMinore-Memorial-ScholarshipApplication-2015.pdf to view the application.

EPA Releases Pesticide Certification Proposal The Environmental Protection Agency (EPA) released a proposal to update pesticide certification requirements for the application of restricted use pesticides. The proposed regulation would require applicators to demonstrate “core” competency for private application, aerial application or fumigation; require recertification every 3 years through written test or training/continuing education; establish a minimum Rediscover WH E ATE AT | SEPTEMBER 2015 15 Rediscover WH | AUGUST 2015 15

age of 18 for commercial and private applicators, with no family exemption; and include additional training requirements for non-certified applicators working under the supervision of a certified applicator. Additional provisions address Indian country certification, providing options that would be consistent with State or Federal certification plans, or a Tribe may create their own certification plan or take no action. If no action is taken, EPA may operate a Federal certification plan. The proposal also includes new requirements for EPA approval of state certification plans including a requirement to impose both criminal and civil penalties. The proposed regulation will be thoroughly reviewed

by NAWG’s Environment and Renewable Resources Committee to develop written comments to the EPA. The proposed regulation can be found http:// www2.epa.gov/sites/production/ files/2015-08/documents/ signed_prepub_pesticidecertapp_ nprm_15p-0215_2015-08-05.pdf.

Senate Appropriations Committee Adopts Pro-Cuba Trade Amendments Before Recess On July 23, the Senate Appropriations Committee considered and approved its version of the FY 2016 Financial Services Appropriations bill, which included consideration of several amendments to improve the U.S. relationship with Cuba.

Specifically, the Committee adopted amendments that would: prohibit funds from being used to ban travel of U.S. citizens to Cuba, from Senator Jerry Moran (RKS); eliminate a financing barrier to trade by allowing for the use 16 2015 16 Rediscover RediscoverWH WHEEAT AT ||SEPTEMBER AUGUST 2015

of private credit for the sale of agricultural commodities to Cuba, from Senator John Boozman (R-AR) based on legislation introduced by Sens. Heidi Heitkamp (D-ND) and Boozman; and repeal the 180 prohibition on vessels that have traveled to Cuba from loading or unloading freight in the U.S. without a license, from Senator Jon Tester (DMT). NAWG applauds adoption of amendments to enable U.S. wheat farmers to export to Cuba and continues to advocate for expanding trading opportunities through stand-alone legislation and the Appropriations process.

Fall Wheat Conference Registration is Open Registration for the 2015 Fall Wheat Conference is now open.

The Fall Wheat Conference will be held at the Hyatt Regency Lake Tahoe Resort in Incline Village, Nev. from November 3-7. Wheat growers from across the country will come together to discuss policy issues and forward-looking planning for the wheat industry. The Conference consists of NAWG committee and board meetings, the NWF board meeting and joint committee meetings with U.S. Wheat Associates. For more information on the Fall Wheat Conference and to view the meeting agenda visit our website at http://www. wheatworld.org/meetings-events/.

Commodity Classic 2016 – Why Wheat Growers Should Attend The 2016 Commodity Classic will be held in New Orleans, La. March 3-5. Check out this video at https://www. youtube.com/watch?v=cLAMF8G6Lo to see why you should

attend Commodity Classic to stay in the know on best management practices and the latest technologies. Commodity Classic is the premier convention and trade show of the National Association of Wheat Growers, National Corn Growers Association, American Soybean Association and National Sorghum Producers. The show is farmer led, farmer focused and provides educational information and the most recent technology available for growers across the country. Visit the Commodity Classic website at http://www. commodityclassic.com/home for more information.

August 20, 2015 Congress Set to Tackle Number of Issues in September The House of Representatives and Senate are in August recess until after Labor Day. NAWG encourages producers to meet with their Members of Congress and Senators to discuss issues you’re confronting in your operations and to provide input about Farm Bill implementation.

When Congress returns, both chambers have a number of important issues that must be addressed before the end of fiscal year 2015, which concludes on September 30.

Congress must either pass an omnibus Appropriations bill or a continuing resolution (CR) in order to avoid another government shutdown. A shutdown is not out of the question, as neither chamber has acted on all 12 Appropriations bills and the full Senate has not acted on any. While this is not unusual, as most of the last

decade has required continuing resolutions, there are a number of controversial policy disputes, which could lead to an inability to reach an agreement on a CR. In addition to these high profile funding and policy decisions are several key policy reauthorizations before the Agriculture Committees. Congress must reauthorize or extend the Grain Standards Act, which governs grain inspections for export.

They also need to take action on domestic trade, school lunch and school breakfast programs, and the Mandatory Price Reporting Act before their expiration at the end of September. Additionally, the current short-term extension of the transportation bill, which provides funding for the Highway Trust Fund, expires at the end of October. While each of these issues must be dealt with in the very near term, the federal government is also close to hitting the debt ceiling, which will require Congressional action this fall in order to enable the federal government to continue paying its bills.

NAWG continues to be engaged on important issues before Congress affecting wheat farmers.

Maps Provide Interpretation of Water Rule Interactive maps released by the American Farm Bureau Federation (AFBF) show the reach of the Waters of the U.S. Regulation. The maps of Montana, Pennsylvania and Virginia include the different views based on the definitions and distances in the new regulation including waters within the 100-year flood plain and 1,500 feet of a tributary and waters within 4,000 feet of a

tributary. NAWG has been critical of the uncertainty growers will face under the regulation and the difficulty in knowing which waters will be jurisdictional under the Clean Water Act. Even the Army Corps of Engineers staff has expressed a lack of understanding of the regulation and how staff will interpret the rule that went into effect on August 28. NAWG urges Congress to take action as soon as possible to delay the regulation. Take the opportunity to visit with your Member of Congress about this issue during the August recess.

Additional information from AFBF about the maps can be found at http://www.fb.org/ newsroom/news_article/344/.

Maps are available for Montana, Pennsylvania and Virginia.

NAWG Participates in Monarch Meeting NAWG Immediate Past President Paul Penner traveled to Minnesota to participate in the steering committee meeting of the Monarch Collaborative hosted by the Keystone Policy Center. The meeting follows ongoing discussions after a large group meeting last spring. The group is working to develop a framework for further discussion and collaborative efforts to provide education and outreach on the issues surrounding the declining habitat for the Monarch butterfly. Monarch butterflies have been declining in the U.S., Canada and Mexico as has their preferred habitat – milkweed.

The U.S. Fish and Wildlife Service is currently reviewing the Monarch for possible listing as an endangered species. Earlier this summer EPA released a

Risk Management Approach to Identifying Options for Protecting the Monarch Butterfly.

The NAWG Environment and Renewable Resources Committee is developing comments on behalf of wheat growers. NAWG policy supports efforts to prevent the listing of the Monarch butterfly as an endangered species.

Wheat Foundation Accepting Applications for Jerry Minore Scholarship The National Wheat Foundation (NWF) is accepting applications for the Jerry Minore Memorial Scholarship. Four scholarships will be awarded to students who have a personal connection to the wheat industry and a planned career path in agriculture.

“NWF is proud to join BASF in supporting the future of the U.S. wheat industry by emphasizing the power of a good education,” said NWF Chairman Dusty Tallman, a Colorado wheat grower. “In its brief history, the Minore Memorial Scholarship has already provided 12 outstanding individuals the opportunity to continue their chosen course of study.”

The scholarship is named in honor of Jerry Minore, a longtime friend of, and an active participant in, the wheat industry. To honor Jerry’s life and work, the Minore Memorial Scholarship will fund two $1,500 scholarships and two $1,000 scholarships for the 2016-2017 academic year. All applications must be post-marked on or before December 11, 2015.

Applications can be emailed to PMillard@wheatworld.org.

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August 27, 2015 WOTUS Regulation Takes Effect on Friday The implementation date of the Waters of the U.S. regulation was August 28. Lawsuits are pending and states have requested an injunction to stop the regulation from taking effect. NAWG urges members to continue to contact congressional offices expressing concern over this regulation.

WOTUS expands the jurisdiction of the Clean Water Act and does not provide any clarity to growers to help them understand which waters are subject to Clean Water Act regulations. NAWG supports Senate passage of S. 1140, the Federal Water Quality Protection Act, and provisions in the FY2016 appropriations bills to restrict implementation of the regulation.

NAWG Files Comments on Monarch Butterfly Risks The Environmental Protection Agency released a document outlining a risk management approach for identifying options to protect the Monarch butterfly and has been soliciting public comments. EPA indicated the release of the document was just the first step in a process to engage stakeholders to identify information and activities impacting monarch butterfly populations and milkweed habitat. EPA’s actions follow the White House National Strategy to Promote the Health of Honey Bees and other Pollinators.

NAWG submitted comments, stressing the importance of working with wheat growers and the impact restricting access to herbicides, such as glyphosate, would have on 18 2015 18 Rediscover RediscoverWH WHEEAT AT| SEPTEMBER | AUGUST 2015

agriculture operations including weed control, soil health and soil erosion. NAWG serves on the steering committee of the Monarch Collaborative, a group helping to frame the issues surrounding milkweed habitat for monarch butterflies.

EPA Proposes New Pesticide Restrictions to Protect Bees The Environmental Protection Agency issued a proposal to Mitigate Exposure to Bees from Acutely Toxic Pesticide Products and was accepting public comments. The proposal places restrictions on the use of pesticides when bees are in fields under contract for pollination services. EPA will look to State Managed Pollinator Protection Plans to address other pollinator related issues and crops not using pollination services. NAWG submitted comments urging the EPA to use their existing regulatory process to review pesticides for the health and safety and not to rush action.

States should also ensure that local grower groups are involved in the development of state pollinator protection plans.

The Truth About Glyphosate, Part 3: How does USDA collect farm data?

The National Wheat Foundation is doing a series of blogs, titled “The Truth About Glyphosate”, sharing the facts about glyphosate and its use in wheat. The third part in the series was posted on The Word on Wheat blog.

Our country has the safest, most abundant food supply in the world. Other countries rely on the U.S. to set safety standards that impact people globally. Wheat

growers raise their crops with care to ensure it is as safe for families everywhere as it is for their own.

As discussed in a previous blog, herbicides are one tool for any grower to manage weeds in any crop and produce the best quality product possible in any given year. U.S. wheat growers are no exception. After mandatory pesticide training to obtain an applicators license, wheat growers follow EPA approved label directions when applying any type of crop protection material.

The USDA surveys U.S. wheat growers about their agronomic practices including the use of herbicides such as glyphosate.

USDA conducts personal interviews with growers across the country to understand which pesticides are used in wheat production. The examination of pesticide use trends is their objective and is critical for an informed pesticide policy debate and science-based decisions.

These surveys have been done in 2000, 2004, 2006, 2009 and 2012. In 2009, 3,699 farms were chosen at random from a list of farms reporting wheat plantings to USDA. Data were collected for a single field at each farm rather than the farm as a whole.

Apply NOW for the 2015 WILOT Program The National Wheat Foundation’s (NWF) WILOT Program, funded by a grant from Monsanto, is now in its 19th year and is open to 10 selected U.S. wheat growers interested in serving in a leadership position at the state or national level. The 2015 Wheat Industry Leaders of Tomorrow (WILOT) Program is

set for Saturday, November 14 through Thursday, November 19 in St Louis. The deadline for submitting applications is Friday, September 18. Speakers include: Joyce Schaeffer (MyersBriggs; Working Productively with Others), Jana McGuire, Center for Food Integrity (Trust in the US Food Supply and Communicating with the Public), Dr. Barry Flinchbaugh, Kansas State (Ag Economics and Policy) and the Standing Partnership (media training/ messaging) who will be sharing some of their experience prepping WILOT class members for the media and the podium.

The class will also be involved in discussions about current and forthcoming Monsanto wheat innovation. Participants will be selected by Friday, September 25, so don’t delay in submitting your application. Visit www. wheatfoundation.org/projectsprograms/ to apply.

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News from : August 13, 2015 Nearby SRW Futures Position Reflects Potential High-Quality Supply Shortage

By Stephanie Bryant-Erdmann, USW Market Analyst Over the past fifteen years, KCBT hard red winter (HRW) wheat futures prices averaged $0.35 per bushel over CBOT soft red winter (SRW) futures.

Recently, however, the gap between CBOT and KCBT narrowed and then flipped in the nearby September contracts due to bullish fundamental supply and demand factors affecting the SRW marketplace.

Traditional thinking may consider SRW as a “commodity” wheat category, instead of a functional ingredient. SRW works well as a lower cost, blending wheat, so countries with government wheat purchase programs and subsidized foodstuff production — notably Egypt, which bought 3 million metric tons (MMT) of SRW in marketing year 2007/08 — used to dominate U.S. SRW imports.

The growing global middle class is demanding more dietary variety. Euromonitor reports that pastry and cake consumption is growing at a rate of about 3 percent per year. Biscuit (cookie) 20 20

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and cracker production is also increasing as processors respond to changing demographics and the resulting retail and export sales opportunities for these product lines. To meet demand, they are turning to SRW, as well as soft white (SW), wheat from the United States.

Similar to SW, SRW has low protein content, a soft endosperm and weak gluten that is well suited to the production of these products. Mexico, home to Bimbo, the world’s largest baked goods company, and an increasing number of wheat food snack companies, has imported an average of 1.14 MMT of SRW over the past five years. Similarly, Colombia, with two of the largest cookie and cracker companies in Latin America, increased total SRW imports by 37 percent from marketing year 2013/14 to 2014/15.

This increased demand for the unique characteristics of SRW, along with potential supply issues foreseen by the global market in 2015/16, indicates why SRW futures prices recently topped HRW futures. For example, USDA pegged SRW planted area for 2015/16 down 7 percent from the five-year average and production to be 15 percent less than the 2014/15 crop.

Additionally, excessive moisture,

disease pressure and harvest delays adversely affected quality in much of the SRW growing areas, contributing to some supply scarcity in the top SRW milling grades. The cumulative test weight average of 57.2 lb/bu (75.4 kg/hl) was almost 1 lb/bu lower than the 58.1 lb/bu (76.5 kg/hl) recorded in 2014, while protein at 9.9 percent (12 percent moisture) and 1000 kernel weight at 32 grams were the same as in 2014/15.

While the SRW wheat market certainly has a more bullish cash market scenario than HRW, the U.S. wheat store is always open and customers are encouraged to set up a meeting with their local USW representative who can help them review their quality specifications to ensure that their purchases meet their expectations and needs.

Doha’s Dead End

By Ben Conner, USW Deputy Director of Policy Since 2001, trade negotiators around the world have been trying to reach an agreement to lower tariffs through World Trade Organization (WTO) negotiations known as the Doha Round. USW supports the goals of the Doha Round, because it would make U.S. wheat more affordable to many of our export customers.

However, to date there has been

no indication that those goals will be realized. Instead, many countries have approached the talks with limited ambitions or expected much in return for little input. The July 31, 2015, deadline for a new negotiating plan passed with no results.

Part of the challenge is the difference between what are known as bound and applied tariffs in WTO terminology.

Bound tariffs are what countries agreed to as a maximum tariff rate on a particular product.

Applied tariffs are the tariff levels actually applied to products in a given year, though the applied level cannot exceed the bound level. The discussions in the Doha Round have only considered cutting bound tariff levels, but these are often much higher than the applied tariff. For example, Kuwait has a wheat bound tariff of 100 percent, but for the past three years has not applied any duty on imported wheat. If a Doha Agreement were to cut bound tariff levels by 90 percent, that tariff level in Kuwait would still be much higher than the current duty-free rate. Overall, there would be very few countries in the latest Doha negotiating document that would be obliged to grant significant additional market access for wheat.

In addition to the lack of meaningful market access, the latest Doha negotiating document — dating back to 2008 and often referred to as “Rev 4” — would require the United States to substantially reduce its ceiling on domestic support for U.S. farmers.

If there is to be a balanced Doha Agreement, any reduction in U.S. farm support would have to be accompanied by reductions in

tariff walls that other countries use to support their farmers.

Again, very few countries have been willing to do that.

A major shift has occurred since 2008, in that many countries using tariff barriers to protect their farmers are now also providing substantially higher farm subsidies. Several countries, including the world’s two largest wheat producers (India and China), are blatantly violating their current WTO commitments on farm subsidies.

These major wheat-producing countries have essentially taken the position that they should be able to continue violating the WTO Agriculture Agreement and offer wheat exporters like the United States little or no additional market access. At the same time, they would demand significant reductions in U.S. farm support programs. That is a onesided deal, U.S. agriculture cannot accept.

This is a simplified view of the dilemma that trade negotiators face, but it reflects one of the most entrenched arguments of the Doha Round. It is why negotiators missed the July 31 deadline for a new work program, and why it is virtually impossible for the discussions this fall in Geneva to produce any significant breakthroughs that resemble the original goals of the Doha Round.

The best approach would be for WTO members to agree at the Nairobi Ministerial in December to recalibrate expectations to match current realities, or put Doha behind them and consider new ideas, including USW’s Wheat Food Sectoral Global Food Security Initiative (“USW

Presents Global Wheat Food Security Initiative to International Millers”).

An Expanding Filipino Milling Industry Sends Trade Team to the United States The southeast Asian wheat market is a story of success for the U.S. wheat industry and its customers. In the 2014/15 marketing year (June to May), the region accounted for 20 percent of global U.S. wheat sales. With a strong milling industry to support it, the Philippine wheat market continues to be one of the region’s most consistent and important export markets year after year. In 2014/15, the Philippines was the third largest buyer of U.S. wheat and the second largest buyer of both SW and hard red spring (HRS) wheat, setting a new sales record for the second year in a row.

Looking ahead, the Philippine milling industry is growing and a new generation of managers is emerging. Building on more than 50 years of service in the Philippines, USW continues to play a role in these transitions and strengthen its relationships in part by hosting four milling industry customers on a recent visit to the United States.

“This is a trade team of emerging leaders that represent growing market trends in the Philippines,” said USW South Asia Assistant Regional Vice President Joe Sowers, who traveled with the team. “We invited participants that we think will best apply what they learn on the trip to the challenges and opportunities presented by the evolving market environment.”

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USW worked with the North Dakota Wheat Commission (NDWC), Montana Wheat and Barley Committee, Washington Grain Commission, Idaho Wheat Commission and Oregon Wheat Commission to organize this team. USW Policy Specialist Elizabeth Westendorf joined Sowers and the team for part of the tour. Together, Sowers and Westendorf provided a recap: “Our purpose was to demonstrate how the quality, value and reliability of U.S. wheat and its supply chain can help these millers grow their own businesses,” said Sowers.

The team saw a HRS crop in North Dakota with excellent yield potential and surprisingly strong quality. Typically, a large harvest results in lower protein levels, but the team heard good reports indicating protein and DHV levels should be far above average and the challenging 2014/15 crop. NDWC chairman David Clough said that good spring weather allowed for early planting and continued through the summer to push yields to near record levels. While still in North Dakota, the team saw exciting research underway by Dr. Senay Simsek with North Dakota State University (NDSU) on using Solvent Retention Capacity (SRC) analysis on hard wheat applications. They also discussed seasonal basis pricing with NDSU agricultural economist Dr. Bill Wilson, noting that current basis levels are at historic lows, presenting excellent buying opportunities.

The early planting and harvest story was echoed in HRW and SW growing regions. In Montana, 22 Rediscover WHE AT | SEPTEMBER 2015 22 Rediscover WHE AT | AUGUST 2015

the team got a firsthand look at the conclusion of HRW harvest where results were extremely variable. There were reports of excellent yield and quality from some farmers while others reported the opposite. Team participant Ramon Estrella said the visit to the Mattson farm in Chester, MT, where the team rode in combines as the family finished their 2015 crop, was a highlight.

The team had interesting discussions with CEO Vince Mattson on farming practices and the challenge of current crop prices running below production costs. Past USW chairwoman Janice Mattson told the team most of their fields had received less than 3.5 inches of rain this calendar year. Luckily, the crop had an ideal start with plentiful moisture before drought took its toll.

Moving to Washington and Idaho, most farmers were finished with harvest on slightly increased planted area but under lessthan-ideal growing conditions.

The crop went into dry ground following the 2014 drought and continued to suffer throughout the year. Timely rains saved bushels, but protein levels will be higher than average again this year. Traders in Portland, OR, suggested that protein spreads would be wider in SW than HRS this year. Enzo Ladrido, with Atlantic Grains, pointed out the SW protein situation this year will create opportunities for buyers who can use higher protein levels. Participant Welly Toha, with Monde Nissin, said the millers were impressed by the “use of technology to conquer the landscape,” referring to selfleveling combines used in the unique terrain. While in Portland

the team also visited a local supermarket to discuss product placement and marketing and, on the last day of the tour, the team discussed barge movement with Shaver Transport.

Pictures from the team’s tour are posted on Facebook at https:// www.facebook.com/uswheat.

Visiting Caribbean Flour Millers Represent New Market Potential for U.S. Wheat It makes sense that Caribbean countries import most of their wheat from its nearby neighbor, the United States, but changes in the milling industry present new opportunities to reach even more markets in the region. The week of Aug. 16, four current and potential wheat buyers from Guyana, Haiti, St. Vincent and Trinidad who want to learn more about U.S. wheat quality and its supply system will visit North Dakota, Nebraska, Kansas and Louisiana. USW is sponsoring this team visit in cooperation with its state wheat commission members and USDA’s Foreign Agricultural Service (FAS).

“These are senior managers in their milling operations, but they are either new to the industry or have a history of purchasing wheat from competing origins,” said Chad Weigand, USW assistant regional manager, Mexico City, Mexico, who will travel with the team. “The farmers, wheat merchandizers and federal grain inspectors the millers will meet on this trip will share many reasons why U.S. wheat should be their primary supply.”

Weigand said this visit supports an opportunity for growth, as

well as to overcome challenges, in the region from new flour mills.

That is why this team includes a representative from a new mill in Haiti that started operating only in the past year. The manager from St. Vincent on this team will also participate because his mill will soon have to compete with a new mill on the island of St. Lucia that will likely use French wheat. His participation will allow him to discuss opportunities with suppliers to ship to multiple destinations in the Caribbean.

“Building knowledge and confidence in the U.S. supply system has been a successful strategy,” Weigand said. “We invited the general manager of a Trinidad flour mill who has been in the industry for just one year to participate in the team. And, based on several years of trade and technical service by USW, the Guyana executive on the team is transitioning to U.S. HRS wheat after purchasing Canadian spring wheat for many years.”

Weigand also noted that this will be the first USW-sponsored wheat buyer team to visit the new export grain terminal in the Port of Lake Charles, LA, now operated by the international commodities company Tradiverse. The Lake Charles facility, which includes a grain cleaning system, is the first new export terminal built in the U.S. Gulf tributary in 30 years.

CIMMYT: Anti-Wheat Fad Diets Undermine Global Food Security Efforts The International Maize and Wheat Improvement Center (CIMMYT) recently shared a “wheat discussion paper” by Britain’s University of Warwick (Lillywhite and Sarrouy 2014)

that addresses the disturbing implication that wheat products cause of health problems, resulting in an increasing consumer preference for grainand wheat-free diets. For many health professionals this is a worrying trend, the authors said, because wheat supplies 20 percent of the world’s food calories and much of its protein, but also has important benefits beyond nutrition.

The Warwick paper scientifically assesses the benefits of whole grain consumption, information that the authors said seems to have been lost in media headlines and the reporting of “pseudoscience.”

Commissioned by British cereal-maker Weetabix, the paper concludes that whole grain products are good for human health, apart from the 1 percent of the population who suffer from celiac disease and another 1 percent who suffer from sensitivity to wheat (Lillywhite and Sarrouy 2014). Eating whole grain wheat products is positive, improves health and can help maintain a healthy body weight, the authors report.

This wheat discussion paper serves as a foundation for further discussion. It aims to highlight unsubstantiated nutritional claims about wheat and shine a spotlight on the important role of wheat and fiber in human diets. It also seeks to encourage conversation about how nonscientific claims about wheat could affect poor consumers and global food security.

CIMMYT posted the paper online at http://bit.ly/1MomnZX.

Wheat Industry News Monitor U.S. Wheat Quality as Harvest Moves Forward. With the northern HRW, durum and HRS harvests just underway, many data points are left to collect for USW’s annual crop quality survey.

Buyers and end users can monitor the latest information in USW’s Harvest Reports, posted at www. uswheat.org/harvest every Friday afternoon (Eastern Time). Final quality reports, with separate, detailed reports by class for the entire 2015/16 U.S. wheat crop will also be available in USW’s Crop Quality Report, posted at www.uswheat.org/quality.

Wheat and Corn Executive Honored. U.S. Grains Council (USGC) recently recognized Tadd Nicholson, executive director of the Ohio Corn & Wheat Growers Association and, two other state grower organization executives for service to USGC. Nicholson, who is also executive director of the Ohio Small Grains Marketing Program, a USW member organization, has served with USGC for 10 years. Read the full announcement at http://www. ohioagconnection.com/storystate.php?Id=673&yr=2015.

Kansas State University’s Leadership in Wheat Research Recognized with $1.6 Million Grant. The National Science Foundation's Plant Genome Program awarded the threeyear grant to fund projects and collaborations to help train new generations to answer challenging plant genomics questions. To read the fulll story visit www.hpj.com.

Wheat Initiative launches Strategic Research Agenda. To meet what is expected to be a 60 percent rise in wheat demand by Rediscover WHE AT | SEPTEMBER 2015 23 Rediscover WHE AT | AUGUST 2015 23

2050, coordination of research and significant investments are needed to increase wheat sustainable production globally.

The Wheat Initiative, established in 2011 as part of the Action Plan of the G20 Ministries of Agriculture, recently presented its Strategic Research Agenda (SRA) that identifies key research priorities for the short, medium and long term and lists “outstanding game-changers that will revolutionize wheat breeding in the future.” Read more at http:// bit.ly/1f8lyFT. Iteris Signs ClearAg Agreement to Support Grain Quality and Consumer Food Safety. The agreement, signed with the Minnesota Wheat Research and Promotion Council, a USW member organization, will combine local wheat disease risk forecasts with other farm production data that, in turn, will help farmers improve disease control and wheat quality. Read the full announcement at http:// agnewswire.agwired.com/wpcontent/uploads/sites/8/2015/08/ IterisRelease.pdf.

August 27, 2015 Price Report, Charting Tools Help Overseas Wheat Buyers Manage Risk

By Stephanie Bryant-Erdmann, USW Market Analyst Every Friday for more than 40 years, USW has called trade contacts around the United States to gather FOB (free-onboard) price indications and market intelligence for each of the five U.S. classes of wheat with exportable supplies: soft red winter (SRW), hard red winter (HRW), hard red spring (HRS), 24 24

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soft white (SW) and durum. This information helps create USW’s weekly Price Report, as well as the Nearby Cash Price Charting and Specific Deliver Month Charting Tools, which can found at www. uswheat.org/prices.

Price Report*. As the only weekly public source for U.S. wheat export prices, this is a unique report. Currently, seven companies that ship wheat from the Gulf, the Pacific Northwest (PNW) and the Great Lakes actively take part in USW’s Price Report. In return for their time, which is greatly appreciated, these companies receive data upon request, are included in trade team visits to the United States and are invited to send selfsponsored representatives to trade servicing activities held by our overseas staff.

The report also contains current exchange rate information for seven of the largest wheat markets, freight price indications and highlights of the week’s major events and reports that may affect the markets. Here are excerpts from the Aug. 21, 2015, Price Report: Even with a brief rally, supported by uncertainty about export delays from Russia, a

weaker U.S. dollar and reports of Argentina losing an estimated 6 percent of its wheat crop to floods, wheat futures markets ended the week on a bearish note.

With ample global supplies and weak export demand continuing to pressure the market, futures continued a long trend down.

September CBOT wheat closed 7 cents lower at $5.00/bu, KCBT fell 19 cents to $4.71/bu and MGEX lost 6 cents to $5.13/bu for the week. September CBOT soybeans closed down 20 cents at $9.05/bu and September CBOT corn was up 1 cent from last week at $3.65/ bu.

Agricultural consulting group, SovEcon, reported that year-todate Russian wheat exports at 1.7 MMT are down 50 percent from the same time in 2014/15 due to harvest delays and the export tariff put in place on July 1. This

is the lowest level seen in four years, but trade experts caution it may be artificially low because of reporting delays.

In its weekly crop progress update, USDA reported spring wheat harvest is 53 percent complete, ahead of the 5-year average pace of 31 percent.

Crop conditions improved with 70 percent rated good to excellent, up one percent from the prior week and an unchanged 6 percent rated poor.

While USW’s Price Report is an excellent tool to help manage price risks in your buying regimen, please note these are only price indications and actual quotes may differ greatly depending upon specifications.

If you want to receive the Price Report in your inbox every Friday, please email sbe@uswheat.org with your first and last name, company affiliation and email address.

USW also posts the Price Report online at www. uswheat.org/prices.

Specific Delivery Month Charting Tool*: This tool allows the user to chart cash and basis prices by delivery month for up to five time series according to the delivery month and year, port, wheat class and protein level. Gulf ports include the Mississippi River and East Texas ports; West Coast (PNW) ports include the Columbia River and Seattle ports; and Lakes refers to the Great Lakes and includes the ports of Duluth, MN, and Superior, WI.

Nearby Cash Price Charting Tool*: Buyers may use this tool to chart export cash prices for the closest nearby shipment period, which is the price column farthest to the left in the report. With data back to 1973, this tool is valuable when looking at price trends over time.

As always, if you have questions about the Price Report, charting tools or other U.S. wheat market factors, please contact your local USW representative. *See the online edition of “Wheat Letter” for additional content.

Russia Going Against the Grain

By Alan Tracy, USW President Russia has a long history of government involvement in the grain business. The old Soviet Union's collectivization of agriculture and its suppression of Ukraine took it from a major grain exporter to, by the mid1970s, the world's largest grain importer. Agriculture rebounded after the Soviet Union collapsed, slowly at first. Then the sudden devaluation of the Russian rouble in October of 1998 led to price differences that encouraged the export, at very cheap prices, of much of Russia's wheat crop that year. Interestingly, the U.S. that winter donated 1.7 MMT of wheat to try to alleviate the shortage, Rediscover WH E ATE AT | SEPTEMBER 2015 25 25 Rediscover WH | AUGUST 2015

with the sales proceeds going to Russia's pensioners who had seen their retirement funds nearly wiped out by the devaluation.

As economic opportunity and private sector investment gradually grew in Russia's grain belt, she once again became a significant exporter and is now usually the fourth largest wheat exporting country after the United States, Australia and Canada. Her soils are good and her farmers are increasingly sophisticated. But Russia's government continues to lay a heavy hand that holds back the potential of her agricultural sector.

Faced with a run-up of global wheat prices in marketing year 2007/08, Russia first imposed a 40 percent export tax and then banned exports entirely for a time to keep bread prices low in Moscow and other urban centers.

In 2010, the government again banned exports and cut across existing contracts leaving buyers high and dry; Egypt, for example, that year spent about $70 million more to replace that wheat from other sources. During the volatile price swings of the past seven years, Russia has curbed exports time and again (see chart below). After each grain harvest, Russian farmers and the trade hurry it out the door, depressing world prices and displacing other exporters, never knowing when that door might close. When the door shuts, world prices swing higher, damaging customers and distorting trade flows. As a 26 26

Rediscover 2015 Rediscover WH WHEEAT AT || SEPTEMBER AUGUST 2015

result, Russian farmers receive on average lower prices than other wheat producers receive, discouraging the very sector that, if allowed to prosper fully, could ensure that Russia will never be short of grain.

Grain trade thrives on certainty.

This year, the Russian government imposed a new system that was supposed to provide more certainty and transparency to its export taxes. It has not worked.

The new system adjusts the tax according to a price formula, expressed in roubles. However, Russian exporters are reluctant to take the risk because world wheat prices are normally expressed in dollars and the rouble exchange rate has been particularly volatile lately, and because it takes a while between agreeing to an export contract and actually delivering it and being paid for it. They could make a contract at a reasonable expected profit only to see that turn into a loss when the tax is applied to the actual export.

Exporters are complaining and exportable grain is backed up into the countryside. No doubt, the government will soon try another tack.

Unfortunately, what the Russian government fails to understand is that they really do not belong in the grain business. Despite good intentions, their actions disrupt trade, stifle growth and deny to both their consumers and their overseas customers the certainty of supply.

With reasonable regulations and support for transportation facilities, but with otherwise a hands-off approach, they could help build agriculture into a great strength for their country. I think they will eventually get it right, but sometimes the process is painful to watch.

2015 U.S. SRW Crop Quality Impacted By the Wet Growing Season The USW 2015/16 SRW crop quality survey is complete and the full report will be available soon at http://www.uswheat. org/cropQuality. Great Plains Analytical Laboratory in Kansas City, MO, collected and analyzed 519 samples from 18 reporting areas in the nine states that typically account for 60 to 70 percent of total SRW production.

USW and USDA Foreign Agricultural Service fund the annual survey.

USW will also share this data with hundreds of overseas customers at several upcoming events, including USW's annual crop quality seminars. Buyers are encouraged to construct specifications carefully to be sure that they receive qualities that meet their needs either for

traditional soft wheat products or for blending with higher protein wheat.

The 2015 SRW production, estimated at 10.6 (million metric tons) MMT, is down nearly 2 MMT from the 2014 crop and is the smallest SRW crop since 2010. Much of the SRW growing area received excessive moisture throughout the spring, encouraging the development of diseases. In many areas rain continued to cause lengthy harvest delays and reduced quality. Drier weather in mid-June allowed harvest to progress in a more timely fashion in the East Coast states.

The overall average SRW grade for 2014/15 is U.S. No. 3.

Average protein is higher than last year and similar to the fiveyear average. Average dockage is also above last year and higher than the five-year average. Falling number values in the Gulf Port states are well below normal, where samples show the adverse effects of excessive moisture.

In the East Coast states, falling number values reflect somewhat better harvest conditions.

Test weight averages are down for both Gulf Port and East Coast states with an overall average test weight of 56.9 lb/bu (75.0 kg/hl).

This average is down 1.1 lb/bu (1.3 kg/hl) from last year and 1.8 lb/bu (2.2 kg/hl) below the fiveyear average. The average total defects value of 4.3 percent is 2.5 percentage points higher than last year and more than double the five-year average. The higher damage values are found mainly in the Gulf Port states; the East Coast damage and total defects are higher than in 2014 but below the five-year averages.

Average wheat protein content of 10.0 percent (12 percent moisture) is slightly above last year and similar to the five-year average for both Gulf Port and East Coast states. Sedimentation and wet gluten values are slightly above last year and the fiveyear averages. The overall DON average of 2.2 ppm is similar to 2014 but above the five-year average. Comparing the two regions, the DON average for the six Gulf Port states is 2.6 ppm, similar to 2014 and about 1 ppm above the five-year average, while the average of 0.7 ppm for the three East Coast states is slightly below the five-year average.

Flour and Baking Data. Buhler laboratory mill flour extraction averages are above the five-year averages overall for both East Coast and Gulf Port states, although flour ash values are also higher. The dough properties are nearly all similar to five-year averages. Farinograph peak, stability and absorption values are somewhat higher than 2014 and similar to five-year averages.

Alveograph P and L values are also higher than last year with the overall W value similar to last year and below the five-year average. The overall cookie spread ratio is below last year but similar to the five-year average, while the overall average loaf volume is below last year and the five-year average.

USW crop quality data and the skilled service from your local or regional USW office will be particularly valuable this marketing year. Because our organization only represents the wheat farmers who help fund our work, you can be confident

that USW provides service and technical support with your best interests in mind.

Taiwan Goodwill Mission Returns to the U.S to Sign Letters of Intent for Wheat Purchases As part of a biennial Agricultural Trade Goodwill Mission to the United States to purchase grains and other agricultural products for the people of Taiwan, the Taiwan Flour Millers Association (TFMA) will be in Washington, DC, Sept. 16, 2015, to sign a letter of intent to purchase U.S. wheat in marketing years 2015/16 and 2016/17.

TFMA imports wheat on behalf of all 20 Taiwanese flour mills and has been a loyal customer of U.S. wheat producers for many years.

USW President Alan Tracy and current TFMA Executive Director Shin-Yao Lin, chief executive officer of Top Food Flour Mill in Taipei, Taiwan, will co-sign the letter.

Delegates from TFMA will start their visit to the United States as honored guests of the Idaho Wheat Commission at the Lewiston Roundup Rodeo Sept.

12. The entire mission’s visit to Washington, DC, includes a welcome reception at the U.S. Department of Agriculture and a reception Sept. 15, 2015, with the signing ceremony the next day at the U.S. Capitol. Taiwan industry representatives will also sign letters of intent with U.S. Grains Council and the American Soybean Association. The entire delegation will also call on members of the U.S. Congress and policy makers in the executive branch.

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After completing formal activities in Washington, DC, the flour millers continue their part of the mission Sept. 17 with visits to Kansas, Montana and Washington to meet with state wheat commission and government representatives before returning to Taiwan Sept. 23 Tracy said the U.S. wheat industry always looks forward to this event and appreciates the long history of mutually beneficial trade relations with the Taiwan milling and wheat foods industry.

“U.S. wheat farmers have maintained a trade office in Taipei since 1966,” Tracy said. “We are proud of that and also quite proud that USW Country Director Ron Lu has been a faithful part of that service for more than 33 years.

We want to thank our customers for importing significantly more U.S. wheat than the 1.7 million metric tons in the agreement signed in 2013.”

USW Welcomes Renewed Ties with Cuba, Sees Many Steps Ahead of Renewed Exports

By Dalton Henry, USW Director of Policy A new era in U.S. foreign relations began Aug. 14, 2015, when after some 54 years U.S. Secretary of State John Kerry formally re-opened the American embassy in Havana, Cuba.

This historic event comes eight months after Cuban and U.S. leaders announced an effort to re-establish diplomatic ties and remove barriers between the two countries in place since early days of the Cold War. In those eight months, there were several substantive changes, 28 E EATAT| SEPTEMBER 2015 28Rediscover RediscoverWH WH | AUGUST 2015

including two that stand out as good news for U.S. agriculture.

The removal of Cuba from the U.S. “State Sponsors of Terrorism” list will loosen restrictions on U.S. banks while new interpretations of rules will ease the regulatory burden on companies doing business in Cuba. Even with all these changes, there is a great deal of work ahead before U.S. wheat farmers can expect their crop to flow once more to the largest market in the Caribbean (http:// econ.st/1NBdQmO).

Long-term, the full repeal of the embargo is key to re-establishing Cuba as a major trading partner with the United States. The U.S. Agriculture Coalition for Cuba, a broad-based business group launched in early 2015 to advocate for normalizing trade relations, prioritizes the repeal as its overarching goal. It is also a priority for the U.S. wheat industry and both USW and the National Association of Wheat Growers are actively involved in the coalition’s efforts. Given the remaining political issues, however, it seems likely that the embargo will not end soon.

Many Cuban policy experts and business leaders believe it will not end until 2017 or later, a belief that USW shares today.

Aside from the embargo, two other major hurdles remain: U.S. companies may not extend credit to foreign buyers and ships that call on a Cuban port generally may not return to a U.S. port for 180 days. Recently, a number of U.S. policymakers have urged changes that would remove these restrictions. If successful, that would place U.S. farmers and exporters on a more level playing field with their global competitors

that enjoy unrestricted access to the Cuban market. Unfortunately, the legislative path forward for these amendments — as well as the embargo itself — is far from certain.

With additional action in the hands of the U.S. Congress, USW takes heart in its experiences in other markets like Nigeria that once showed similar barriers to trade. We will continue trying to re-establish relationships with prospective buyers and provide the trade service information they will need when they once more are able to turn to U.S. wheat.

Wheat Letter Schedule Change Due to upcoming travel and holidays, USW will not publish an issue of “Wheat Letter” on Sept.

10, 2015. Look for the next issue of “Wheat Letter” on Sept. 24, 2015.

Wheat Industry News USW Joins the U.S. Sustainability Alliance (USSA), a group of American farm, fishery and forestry producers that came together to explore and share their values about sustainability and conservation. Together, with partners across the value chain, USSA is committed to responsible management of our resources. Learn more about USSA on its website, http://www. thesustainabilityalliance.us/.

USDA Foreign Agricultural Service had Released GAIN Reports on Agricultural Biotechnology for several countries including highlights from Canada, Mexico, South Africa, Honduras and Vietnam.

Read the full report at http://www. isaaa.org/kc/cropbiotechupdate/ article/default.asp?ID=13675.

Look for Important Information in “The Truth About Glyphosate,” a blog sharing the facts about the herbicide glyphosate and its use in the wheat industry sponsored by the National Wheat Foundation and shared online at http:// wheatfoundation.org/blog/.

The Northern Crops Institute Introduces New Staff Members.

Neil Doty, who will serve as technical director, has already had a successful career in the food industry, co-founding the Giant Sunflower Seed Company in Wahpeton, ND. Betsy Armour will become NCI’s manager of communications and public relations. Armour previously served as the communications director of the North Dakota Corn Growers Association.

MSU Durum Wheat Varieties Now Licensed to Northern Seed. Montana State University (MSU) has completed an agreement to license more than 700 developmental lines of durum wheat to Montanabased Northern Seed, LLC. The developmental durum lines come from the research program of Joyce Eckhoff, who recently retired after 28 years at MSU’s Eastern Agricultural Research Center near Sidney, MT. Read the full announcement at http:// www.montana.edu/news/15679/ msu-durum-wheat-program-tobe-carried-forward-by-montanacompany.

genetics and genomics team at Sabanci University in Istanbul, Turkey, and at MSU will build a significant integrative research program addressing Montana’s grains industry challenges. Read the full announcement at http:// www.montana.edu/news/15677/ msu-hires-world-leader-in-cerealgenetics-as-first-montana-plantsciences-chair.

Registration is Now Open for the AIBI-KSU Grain Milling and HACCP Workshop planned for Oct. 27 to 29, 2015, at the IGP Institute in Manhattan, KS. The course will cover a variety of topics including the history of HACCP, identifying key parts of wheat milling, identifying common sanitary design flaws in mills, communicating to company associates why FSMA was implemented, applying 12 steps of Codex to a grain milling operation to create a HACCP plan and compiling a HACCP manual.

Learn more and register at www. aibonline.org.

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.

MSU Hires Cereal Genetics Leader. MSU also announced it has hired Dr. Hikmet Budak as chair of Montana Plant Sciences, the first endowed chair in the history of MSU’s College of Agriculture. Dr. Budak formerly headed a plant Rediscover WH E ATE AT | SEPTEMBER 2015 29 Rediscover WH | AUGUST 2015 29

Hello Kansas Wheat.

Maltby Market Analysis

by Dan Maltby

Pretty much the same thing…chaos in something, somewhere creates uncertainty, which is never a confidence builder. And as far as wheat specifically goes, we haven’t seen new inputs which make us confident a supply shock is just around the corner…if anything, we saw the opposite this week when the International Grains Council issued their August update, and raised their world wheat production estimate by 10 million tonnes.

This is an IGC chart. They now estimate world wheat production at 720 million tonnes, matching last year’s record world wheat crop. World wheat consumption climbs slightly, as more wheat will be fed (the European maize crop declined significantly), but this isn’t very bullish, as in this case, it means some world feed wheat prices are even money with imported corn prices. The net effect is world wheat ending stocks increase.

We see no new evidence of any wheat supply shocks anywhere. Argentina’s wheat production will suffer, but the Brazilian buyer is not in a hurry to pay up to buy deferred shipment wheat.

Thus the North American wheat farmer sits on much on his crop, facing low prices, and deep down, knowing it’s going to be a long year, or maybe a long couple of years.

He has few alternatives, and the winter wheat producer will be planting another crop in less than 2 months.

For the most part, he has been down this road before, although as his input costs have risen, and land rents have not declined, he is facing an extended period of financial difficulty.

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 #185 danmaltby.riskmgmt@gmail.com 08/28/15 pg. 1 30 Rediscover RediscoverWH WHEEAT AT ||AUGUST SEPTEMBER 30 20152015

His main strategy is probably to store the wheat. And hope for better prices later.

This is a continuous KC wheat chart, shown with a blue line of KC July 16, currently about 60c/bu more than spot futures prices:

That’s a pretty good carrying charge, more than likely covering all storage costs, possibly offering some additional revenue potential. The bad news is the only way this can be locked in is to actually sell wheat for deferred delivery.

Merely sitting on the wheat, and selling it later will not work if the deferred futures (July16) just continue to sink to the nearby price.

THUS, assuming a producer sold 30% or so of his wheat at harvest, and assuming he will be planting another crop…selling another 10 or 20% of this year’s crop he is sitting on against new crop July16 KC futures is probably better than doing nothing.

This week’s futures table shows the July 16 vs the Sept 15 difference. It also rather grimly shows wheat continues to make new 11 week closing lows, shown in red fonts, which means no trading funds will be long wheat. Nor will they be long soybeans.

CLOSE

KWU15

KWZ15

KWN16

CU15

CZ15

CN16

WU15

MWU15

MWZ15

SX15

08/28

$4.58

$4.84

$5.18

$3.63

$3.75

$3.98

$4.77

$4.91

$5.12

$8.86

08/21

$4.71

$4.93

$5.27

$3.65

$3.77

$3.99

$5.00

$5.02

$5.16

$8.90

08/14

$4.90

$5.10

$5.44

$3.64

$3.76

$3.99

$5.07

$5.19

$5.34

$9.20

08/07

$4.93

$5.14

$5.47

$3.73

$3.84

$4.06

$5.11

$5.25

$5.41

$9.63

07/31

$4.92

$5.12

$5.44

$3.71

$3.81

$4.04

$4.99

$5.24

$5.41

$9.40

07/24

$5.07

$5.27

$5.58

$3.93

$4.03

$4.23

$5.12

$5.45

$5.63

$9.65

Kansas Wheat market update #185 danmaltby.riskmgmt@gmail.com 08/28/15 pg. 2

Rediscover WHE AT | SEPTEMBER 2015 31

07/17

$5.47

$5.66

$5.95

$4.20

$4.31

$4.51

$5.54

$5.75

$5.91

$10.07

07/10

$5.72

$5.92

$6.19

$4.35

$4.45

$4.63

$5.76

$6.08

$6.22

$10.22

07/02

$5.92

$6.11

$6.35

$4.29

$4.37

$4.56

$5.91

$6.24

$6.40

$10.30

06/26

$5.69

$5.89

$6.18

$3.93

$4.02

$4.24

$5.68

$6.09

$6.22

$9.86

06/19

$5.13

$5.32

$5.63

$3.59

$3.69

$3.94

$4.93

$5.54

$5.67

$9.40

06/12

$5.26

$5.53

$5.82

$3.59

$3.70

$3.95

$5.11

$5.70

$5.83

$9.04

Corn is interesting, unable to make a new 11 week closing low for 10 weeks now, although it’s only 6c away from that in Dec 15 corn futures. This period of flat prices indicates the market is fairly comfortable with a national average yield of 165 to 167 bu/ac. I admit I do not think a 168 bu/yield is fully factored in, although I also admit I don’t think the final USA average yield will be that high.

Dec corn is back to prices of a year ago, and while it hasn’t been able to push lower, the couple of rallies were unable to hold:

I think this corn crop year will offer few rallies, although another push to $4.00 cannot be ruled out. And if we get one sometime this fall or winter, use it to move some grain.

This long term corn chart shows $3.50 support, and better underlying support at $3.25, and of course even better underlying support is down around $3.00, and while no one likes those price ideas, the market will go there if allowed, thus using a rally to $4.00 to price bushels seems good to me.

I suspect the Chinese government will change their internal corn price support mechanisms this coming year, and that will not be seen as a bullish input.

Weekly continuous corn futures, going back to 2007:

Kansas Wheat market update #185 danmaltby.riskmgmt@gmail.com 08/28/15 pg. 3 32

Rediscover WHE AT | SEPTEMBER 2015

Will corn ever go back to those $6.00, or $7.00 or higher prices? Yes. But it will not be because of runaway demand. It will come from a supply shock, and what that really means is another drought in the USA Corn Belt. And once the Chinese do finally lower their internal price support, they will chew through their currently burdensome supplies, setting the stage for extreme volatility and a massive corn price push higher again.

Soybeans also are subject to the Chinese support system. The Chinese will consume every bean grown in the world. Which brings up the fact that most soybeans come from South America. Soybeans are a form of currency, and in effect, they are a form of an investment, and in that regard, not totally dissimilar from gold or even the stock market, and as we saw this week, that is not just always a one way ride higher‌ November beans are showing a bear flag, pointing to lower prices. Maybe that will fail, but‌

Kansas Wheat market update #185 danmaltby.riskmgmt@gmail.com 08/28/15 pg. 4

Rediscover WHE AT | SEPTEMBER 2015 33

We’ll finish with this KC Dec15 wheat chart.

The steep longer term down trend (blue line) is clearly losing momentum, although unfortunately all that means so far is wheat won’t go down as fast. It will be a slower grind lower.

Bottom signs would be shown if wheat doesn’t go thru the red line, and closes higher than the green line. I would like to believe we will see those things happen, but must state that we sure do not see them right now.

And thus cash prices remain bad, and actually got a little worse this week.

Date 08/28 08/21 08/14 08/07 Date 08/28 08/21 08/14 08/07 BASIS 08/28 08/21 08/14 08/07 Date 08/28

Dodge $4.13 $4.26 $4.45 $4.48 Concordia $4.31 $4.41 $4.60 $4.63 Dodge -45 -45 -45 -45 Concordia -27

Colby $4.20 $4.33 $4.52 $4.53 Salina $4.43-$4.46 $4.56-$4.56 $4.75-$4.75 $4.78-$4.78 Colby -38 -38 -38 -40 Salina -15, -12

Goodland $4.14 $4.28 $4.47 $4.50 Hutchinson $4.29-$4.49 $4.42-$4.62 $4.61-$4.81 $4.64-$4.93 Goodland -43 -43 -43 -43 Hutchinson -29, -09

Protection $4.23 $4.36 $4.55 $4.58 Wichita $4.35-$4.50 $4.48-$4.66 $4.67-$4.85 $4.70-$4.88 Protection -35 -35 -35 -35 Wichita -23, -08

Scott City $4.08 $4.21 $4.40 $4.43 Ark City $4.29 $4.42 $4.61 $4.64 Scott City -50 -50 -50 -50 Ark City -29

Kansas Wheat market update #185 danmaltby.riskmgmt@gmail.com 08/28/15 pg. 5 34

Rediscover WHE AT | SEPTEMBER 2015

Sublette $4.13-$4.18 $4.26-$4.31 $4.45-$4.50 $4.48-$4.53

Sublette -45, -40 -45, -40 -45, -40 -45, -40

08/21 08/14 08/07

-30 -30 -30

-15, -15 -15, -15 -15, -15

-29, -09 -29, -09 -29, +00

-23, -05 -23, -05 -23, -05

-29 -29 -29

These are posted against the Sept futures. Next week cash bids will be against the Dec futures, and the basis will be LOWER. I would expect it to get a little better the weeks after that, but it will stay cheap anticipating the secondary movement as elevators get ready for fall grains.

SO far, Brazil is being very patient. While they may be facing a bit of a local supply shock from Argentina, they know the world has plenty, and it indeed is a buyer’s market.

And while it’s not very good, I would recommend getting another 10 to 20% priced, using the KC July, unless you are sure your wheat will not get a good stand this fall.

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 #185 danmaltby.riskmgmt@gmail.com 08/28/15 pg. 6

Rediscover WHE AT | MAY 2015 35

@KansasWheat

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Upcoming Events SEPTEMBER 2015 • Kansas State Fair, September 11-20 • Govenor's Day/ Kansas Wheat Yeild Contest Awards, Kansas State Fair, September 17

NOVEMBER 2015 • USW/NAWG Fall 2015 Board Meeting, November 3-6 • I/UCRC NSF Meeting, November 10-11