Friday, July 30, 2010

Wheat Prices End July with Huge Monthly Gains


According to an A.P. story today wheat prices are rising in July by the biggest amount in more than a half century as severe drought conditions in Russia and other former Soviet republics destroyed grain crops.

If the gains continue, U.S. shoppers could see a bump up in prices of cereals, breads, pasta and other products made with wheat. American wheat farmers, meanwhile, are going to get a boost in income, says Scott Irwin, agriculture professor at the University of Illinois, Urbana-Champaign.

Wheat prices have risen $1.81 a bushel, or nearly 38 percent, this month and are at their highest level since September 2008. It's the biggest gain since at least 1959, according to the Chicago Board of Trade.

No World Wheat Shortage Seen


DTN's Bryce Anderson reports that although some wheat-growing areas in the world have had challenges, the world wheat supply outlook does not expect a shortage, thanks to weather in the U.S.

Bountiful U.S. and Europe wheat harvests are offsetting fears of lower production in Russia and Canada going into late summer. (DTN file photo)The result is a generally bearish market weather factor going into late summer.

"Production losses are being seen overseas, which is cutting into global supplies. However, stocks remain cumbersome," said DTN market analyst John Sanow.

The challenges in other countries included Canada's wheat acreage slashed from spring flooding and Russia's wheat harvest prospects diminished because of summer drought.

But the U.S. winter wheat crop harvest was large; the U.S. spring wheat harvest may match record yields; and the wheat harvest in Europe outside of Russia is going much better than some analysts had expected.

For U.S. hard red winter wheat areas, May rainfall set the tone for harvest success. In Kansas -- the top hard-red-winter-wheat-production state -- May rainfall totaled from 3 to 5 inches over most of the wheat-growing areas. June was drier than normal, which allowed wheat to ripen, and harvest to proceed with few major interruptions.

The final harvest was a good one: the Kansas Agriculture Statistics estimates the 2010 Kansas wheat crop at around 369 million bushels, with a yield of 43 bushels per acre -- the fifth-highest yield on record.

Spring wheat areas also see a good harvest shaping up. Reports from the 2010 North Dakota spring wheat crop tour indicate that yields this year may approach last year's record 39 bushels per acre.

Late-summer drought in Russia puts a bit of a crimp in world wheat supplies. Russia's drought began in April, and has been called the most serious drought since 1880, back to the days of the czars.

"I see no sign in the next two weeks of a change of more rainfall," said Telvent DTN ag meteorologist Joel Burgio. He has tracked and forecast international weather patterns for more than 20 years.

"Early July, we had the drought centered in central Russia and western Kazakhstan," he said. "Now, it looks like the hottest weather is shifting west into the Volga Valley and as far (west) as eastern Ukraine."

But, will even such a historical calamity goad the grain market into a true-blue weather-premium mode? Sanow doesn't think so -- more to the point, he said the market doesn't think so, either.

"The ending stocks-to-use ratio domestically is just shy of 50 percent (the highest level since the 1987-88 marketing year), while the world number is at a strong 28 percent," he said. "With weather remaining a factor in the Black Sea Region, the market could continue to find support, although at some point bearish fundamentals should take control once again."

Wednesday, July 28, 2010

Exporter Wheat Ending stocks Shrink


Exporter stocks of wheat are now forecast to drop year-to-year by 16%, whereas, just a few months ago, these stocks were forecast to expand modestly. Deteriorating crop prospects in several major exporting countries, particularly Canada, Kazakhstan, and Russia, along with strong global import demand, have contributed to that reversal. Tightening supplies are already causing prices in the United States and the EU to rise. However, the drawdown of exporter stocks is expected to partially mitigate the current production shortfall.

The United States is the exception, with expansion currently forecast in production, exports and ending stocks. As supplies for high protein wheat shrink in other exporting countries, the United States is well positioned to take advantage of any further tightening of supplies and/or stronger global import demand.

With planting just getting underway, the Southern Hemisphere producers, Australia and Argentina, are the wildcards in the supply picture since they typically hold relatively little stocks.

Tuesday, July 27, 2010

Conservation Reserve Program General Sign-up Starts Aug. 2


Agriculture Secretary Tom Vilsack announced that a general sign-up for the Conservation Reserve Program will begin on August 2-27. During the sign-up period, farmers and ranchers may offer eligible land for CRP's competitive general sign-up at their county Farm Service Agency office. The 2008 Farm Bill authorized USDA to maintain CRP enrollment up to 32 million acres. Jim Miller, Agriculture Under Secretary for Farm and Foreign Agriculture Services, made the announcement on behalf of Secretary Vilsack during a conference call with reporters.

"America's farmers and ranchers play an important role in improving our environment, and for nearly 25 years, CRP has helped this nation build sound conservation practices that preserve the soil, clean our water, and restore habitat for wildlife," said Miller. "Today's announcement will help us create a greener and healthier America, and I encourage all interested farmers and ranchers to contact their local FSA office to learn more how to take advantage of this opportunity."

To help ensure that interested farmers and ranchers are aware of the sign-up period, USDA has signed partnership agreements with several conservation and wildlife organizations, which will play an active role in USDA’s 2010 CRP outreach efforts. Additionally, Secretary Vilsack has recorded two public service announcements, which are available to the press and public at www.fsa.usda.gov/psa.

CRP is a voluntary program that assists farmers, ranchers and other agricultural producers to use their environmentally sensitive land for conservation benefits. Producers enrolling in CRP plant long-term, resource-conserving covers in exchange for rental payments, cost-share, and technical assistance. CRP protects millions of acres of America's topsoil from erosion and is designed to improve the nation's natural resources base. Participants voluntarily remove environmentally sensitive land from agricultural production by entering into long-term contracts for 10 to 15 years. In exchange, participants receive annual rental payments and a payment of up to 50 percent of the cost of establishing conservation practices.

By reducing water runoff and sedimentation, CRP also protects groundwater and helps improve the condition of lakes, rivers, ponds and streams. Acreage enrolled in the CRP is planted to resource-conserving vegetative covers, making the program a major contributor to wildlife population increases in many parts of the country. As a result, CRP has provided significant opportunities for hunting and fishing on private lands.

Land currently not enrolled in CRP may be offered in this sign-up provided all eligibility requirements are met. Additionally, current CRP participants with contracts expiring this fall covering about 4.5 million acres may make new contract offers. Contracts awarded under this sign-up are scheduled to become effective Oct. 1, 2010.

Monday, July 19, 2010

Reducing Discounts for Low Falling Numbers


The Idaho Wheat Commission (IWC) has assembled information helpful to growers on how to avoid and/or manage discounts for low-falling number wheat in a YouTube video. The informational video features IWC Commissioner Joe Anderson and ARS/USDA Food Technologist Art Bettge.

The falling number test measures wheat embryo germination activity, which may be a result of sprout or frost damage, or from wide temperature swings during ripening.

“Two years ago an additional test was done after there was rain during harvest,” said Joe Anderson. “That was the falling number test. Discounts were severe and some elevators even discounted for both low falling numbers and sprout.”

The IWC produced the nine-minute video to explain what the falling number test measures, why the falling number value is important, what causes low falling numbers and what wheat farmers can do if they have a low falling number score.

“There seems to be a wide variability in the results of falling number tests,” said Anderson. “We are learning that many things can influence the results, get a second opinion, and get a re-test.”

The Reducing Discounts for Low Falling Numbers video can be viewed at www.tiny.cc/idahowheat
Additional information about laboratories which perform low falling number tests and wheat varieties that are susceptible to low falling number can be found at www.idahowheat.org

Friday, July 16, 2010

Wheat prices surge on global weather problems


By SANDY SHORE, AP Business Writer

Wheat prices neared a six-month high Thursday as poor weather conditions continue to impact crops in Russia, Kazakhstan and Canada.

Wheat for September delivery rose 9.75 cents to settle at $5.59 a bushel Thursday after rising to $5.64 a bushel earlier in the day. The price is about $1 a bushel more than it was June 29 and at the highest level since reaching $5.7050 a bushel during trading on Jan. 12.

The rally has been triggered by lower expectations in key wheat-producing regions while the U.S. crop is forecast in good-to-excellent condition.

A severe drought is expected to cut Russia's wheat production by at least 14 percent from last year's harvest and Kazakhstan's production by about 18 percent, according to the U.S. Agriculture Department's July figures.

Rainy weather has hurt the growing season in Canada, where the wheat planting forecast is about 19 percent less than a year ago, the U.S. agency said.

"Any reduced exports out of Russia could very much help U.S. wheat exports," said Richard Feltes, MF Global's director of commodity research.

Corn for September delivery benefited from the rally in wheat prices, rising 9 cents to $3.8425 a bushel. August soybeans gained 2.5 cents to $9.9750 a bushel.

Thursday, July 15, 2010

EPA May Tighten Dust Regulations


Farm Progress reports Chief Environmental Counsel for the National Cattlemen's Beef Association Tamara Thies believes the Environmental Protection Agency has established the foundation for unprecedented regulation of dust. According to EPA's Second Draft Policy Assessment for Particulate Matter, EPA may consider regulating coarse particulate matter at levels twice as stringent as the current standard. Thies says the proposed level would make it virtually impossible for many critical U.S. industries to comply with the standard even with use of best-management practices to control dust.

Thies says many Western states are already having a difficult time meeting the current standard. No-till days have already been proposed for agriculture, severely hindering the ability of farmers to maintain productive operations. In fact, Thies says farmers could be fined for everyday activities like driving a tractor down a dirt road or tilling a field. She warns it would effectively bring economic growth and development to a halt in many areas of the country.

The topic will be brought up for discussion on July 26 during a meeting of EPA's Clean Air Scientific Advisory Committee as it considers whether to revise the current particulate matter standard.

Wednesday, July 14, 2010

Exporters Wheat Ending Stocks Shrink


Exporter stocks of wheat are now forecast to drop year-to-year by 12 MMT (16%), whereas, just a few months ago, these stocks were forecast to expand modestly. Deteriorating crop prospects in several major exporting countries, particularly Canada, Kazakhstan, and Russia, along with strong global import demand, have contributed to that reversal. Tightening supplies are already causing prices in the United States and the EU to rise. However, the drawdown of exporter stocks is expected to partially mitigate the current production shortfall.

The United States is the exception, with expansion currently forecast in production, exports and ending stocks. As supplies for high protein wheat shrink in other exporting countries, the United States is well positioned to take advantage of any further tightening of supplies and/or stronger global import demand.

With planting just getting underway, the Southern Hemisphere producers, Australia and Argentina, are the wildcards in the supply picture since they typically hold relatively little stocks.

Tuesday, July 13, 2010

Spring Wheat Turning Color


Warm and dry weather continues to improve farming conditions and crop progress. Winter and spring wheat headed increased to 96 and 49 percent complete respectively. Winter wheat turning color is 13 percent complete.

Idaho's winter wheat crop is rated 90% good to excellent and the spring crop is rated 97% good to excellent.

Monday, July 12, 2010

2010 Idaho Wheat Varieties


Brundage, a soft white winter variety, remains Idaho’s most popular wheat variety, according to National Agricultural Statistics Service. Statewide, Brundage accounts for 10.0 percent of all wheat planted compared to 10.9 percent of all wheat in 2008. WestBred 936, a hard red spring wheat was the second most popular variety accounting for 9.1 percent of the wheat seeded in 2010. The remaining top five varieties in 2010 are Alturas, a soft white spring, third with 6.7 percent; Jefferson, a hard red spring, fourth with 4.8 percent and Klasic, a hard white spring, fifth with 4.4 percent of all wheat planted.

Comparing 2010’s top five varieties with where they ranked in 2008, Brundage, WestBred 936, and Alturas remained unchanged as the top three leading varieties. Fourth ranked Jefferson was ranked sixth in 2008 and fifth ranked Klasic was seventh in 2008.

By class, soft white winter wheat accounted for 39.3 percent of all wheat acres, down from 41.1 percent of the acreage in 2008. Hard red spring wheat accounts for 19.0 percent this year compared to 18.9 percent in 2008. The third most popular class in 2010 is hard red winter, accounting for 15.7 percent in 2010 compared to 18.2 percent of all wheat acres in 2008. Overall, 34.7 percent of the 2010 wheat crop is hard red winter and spring wheat, down 2.4 percentage points from 2008. Soft white winter and spring wheat accounted for 53.5 percent, down 0.9 percentage points from 2008. The remaining 11.8 percent of the wheat planted was hard white winter and spring wheat, club wheat and durum wheat.

Friday, July 9, 2010

Idaho Winter Wheat Production Up 14 Percent from Last Year


Idaho's expected winter wheat production is 64.4 million bushels, up 14 percent from last year, according to the National Agricultural Statistics Service. Harvested acreage of winter wheat is expected to total 740,000 acres, 40,000 acres more than last year. Yield, as of July 1, is expected to be 87.0 bushels per acre, up 6.0 bushels from last year. Producers with spring wheat are expected to harvest 540,000 acres, up 10,000 acres from 2009. Average yield is estimated at 80.0 bushels per acre, 3.0 bushels more than 2009. Spring wheat production is forecast at 43.2 million bushels, an increase of 6 percent from 2009. Barley production is forecast at 45.6 million bushels, down 6 percent from last year's 48.5 million bushels. Harvested acreage, at 480,000 acres, is 30,000 acres less than last year. The expected yield of 95.0 bushels per acre is unchanged from last year and equals our record high. Oat production is expected to be 1.56 million bushels, down 20 percent from last year. Oat yield for grain, at 78.0 bushels per acre, is unchanged from last year. Acreage harvested for grain, at 20,000, is down 5,000 acres from last year. Dry edible peas planted acreage is estimated to be 60,000 acres, up 43 percent from last year. This is the largest acreage planted since 69,000 acres were planted in 1998. Planted acreage for lentils is expected to total 80,000 acres, up 51 percent from 2009 and the largest acreage planted since 1994 when 86,000 acres were seeded. Austrian winter peas planted acreage, at 15,000 acres, increased 88 percent from a year ago. Peach production, estimated at 8,000 tons, is down 13 percent from last year’s 9,200 tons.

For the United States, winter wheat production is forecast at 1.51 billion bushels, up 2 percent from last month but down 1 percent from 2009. The U. S. yield is forecast at 46.9 bushels per acre, up 0.3 bushel from last month and up 2.7 bushels from last year. Other spring wheat production is forecast at 607 million bushels, 4 percent above 2009. The U.S. yield is forecast at 44.6 bushels per acre, 0.5 bushel below 2009. Barley production is forecast at 182 million bushels, down 20 percent from 2009. Yields are expected to average 71.6 bushels per acre, down 1.4 bushels from last year. Oat production for grain is forecast at 87.7 million bushels, down 6 percent from 2009. If realized, this will be the lowest production on record. The forecasted yield, at 66.7 bushels per acre, is down 0.8 bushel from 2009’s record high yield. Planted acreage of dry edible peas is estimated at 869,000 acres, virtually unchanged from last year. Planted acreage of lentils is estimated at 655,000 acres, 58 percent above 2009. If realized, this will be the largest planted acreage since records began in 1986. Austrian winter pea planted acreage is expected to total 31,500 acres, up 54 percent from last year. The 2010 peach crop is forecast at 1.13 million tons, up 2 percent from 2009.

Friday, July 2, 2010

Idaho All Wheat Acreage Up 4 Percent


Planted acres for all wheat in Idaho are estimated at 1.36 million acres, up 4 percent from 2009, according to the National Agricultural Statistics Service. Acres to be harvested for all wheat are expected at 1.30 million acres, up from 1.25 million acres the previous year. Idaho’s spring wheat seedings, at 560,000 acres, are up 2 percent from the 550,000 acres planted in 2009. Harvested acreage is set at 540,000 acres, an increase of 10,000 acres from last year. Winter wheat seedings of 780,000 acres increased 5 percent from the previous year. Harvested acres are expected to total 740,000 acres, up 40,000 acres from 2009. Area planted to durum wheat is unchanged from last year at 20,000 acres, with 20,000 acres also expected to be harvested for grain.

Thursday, July 1, 2010

June 1 Wheat Stocks


Idaho's June 1 all wheat stocks in all positions totaled 19.3 million bushels, up 4 percent from the 18.5 million bushels in storage June 1, 2009.