What’s Up With American Wheat?
FarmLead’s new editor, Garrett Baldwin, joins Brennan Turner this week in the AWC Market Insider column. You can find Garrett’s bio at the end of the column.
With weather a significant factor in the state of the American wheat crop, the report notes that triple-digit temperatures and dry heat have stretched from the Pacific Ocean to the Midwest at a time that farmers are completing their winter wheat harvest and starting onto spring wheat fields. To learn more about what’s happening across the country, we reached out to a few state-level wheat producer organizations. Executive director of the Nebraska Wheat Board, Robert Schaneman said, “We had a relatively good planting season. We were able to get the crop in on time. We’ve seen adequate moisture but, in some cases, too much moisture. Producers were a little worried about the size of the crop heading into the winter. If you look into the whole area, though, we had a fairly mild winter. They would refer to it as pretty open – which means that we did not have a lot of snow.”
One sentiment shared by many commentators was that the late spring snowstorm covered a large portion of Kansas, Nebraska, Colorado, and parts of the Oklahoma panhandle. As a result, varying degrees of damage have turned up at harvest time. In their weekly report, U.S. Wheat Associates said that disease and "relentless moisture" have affected crops after maturity in western Kansas, eastern Colorado, and western Nebraska. Protein levels of the U.S. winter wheat crop are also in a wide range, between 8.8% and 13%. Schaneman told us, “This is the third crop in a row where we’ve had lower proteins. I would say that for customers seeking higher protein wheat, it’s out there and it’s probably in limited supply. If you are looking, you’ll find what you’re looking for, but you’ll have to pay [a premium] for it.”
This perspective has been more than evidenced in the past few weeks on the cash markets. This is especially true for old crop as those who have specs to showcase their quality on the FarmLead Marketplace are finding $9 CAD / bushel and higher for their old crop spring wheat and above $10 for their durum. Per the PDQ Info website, durum wheat was the big winner for the week in Western Canada, up over 3% across the region but led by Saskatchewan which saw nearly a 6% bump in prices. Hard red spring wheat prices have rebounded after pulling back, up 2.5% week-over-week but gains continue to limited by a Canadian Loonie that is hovering close to an 80 cent USD level. This is also putting pressure on canola. Considering some of the dry weather concerns, net average cash prices were basically unchanged week-over-week, although it continues to have a large trading range.
Coming back to the American wheat crop, the U.S. Wheat Associates note that current testing indicates that the overall crop average now at 60.0 lb/bu. That figure was down slightly from 60.4 lb/bu last week. They also cited that protein levels remained at an average of 11.3%. As Schaneman hints, competition for higher quality grain could fierce as the harvest comes to a close. Verified FarmLead wheat buyers that we’ve spoken with says that there isn't low demand for high protein wheat. More specifically, farmers who can improve their proteins will naturally see higher demand for their product. After knowing your cost of production, we think that knowing your quality is the most important step when it comes to grain marketing. Buyers that we speak to say that grain testing is an important step that producers can take to expedite the selling process and to find eager buyers seeking a unique set of grain specifications.
About a month from now, in August and as Harvest 2017 is gearing up, FarmLead will be releasing a product to help make this grain testing process easier to manage. Until then….
Brennan Turner and Garrett Baldwin
Brennan Turner is the President & CEO of FarmLead.com, North America’s Grain Marketplace.
Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.