More Wheat Goes to Feed as Corn Price Increases
Capital Press – 07/19/2019
More hard red winter and soft red winter wheat grown in the Midwest will be used for livestock feed as their prices become competitive with corn prices. The USDA expects U.S. feed wheat consumption to increase to 3.81 million metric tons in the 2019-2020 marketing year, compared to 1.36 million metric tons in the 2018-2019 marketing year. Wheat becomes an attractive feed ingredient for cattle, hogs and poultry when the cash price gap between wheat and corn shrinks, said Claire Hutchins, a market analyst at U.S. Wheat Associates. Corn prices were roughly $4.25 to $4.30 per bushel in early July, while wheat was about $4.20 per bushel on the Kansas market. “It’s positive for farmers who are holding soft red winter, and some who are holding lower-protein hard red winter,” Hutchins told the Capital Press. “It gives them additional marketing opportunities besides domestic mills.” The move will help reduce supplies, which is potentially bullish for all wheat farmers. The prices of soft white wheat grown primarily in the Pacific Northwest will likely be maintained. Soft white wheat is primarily used for food unless it is significantly cheaper than corn, Hutchins said.
Dry Weather Drags Down Wheat Production in Turkey
World-Grain – 07/18/2019
Unexpectedly dry weather conditions between April and June led to yield and quality losses within the wheat crop in Turkey, according to a Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service of the U.S. Department of Agriculture. As a result, the forecast for wheat production in Turkey for the 2019-20 marketing year has been lowered to 17.75 million tonnes, down from the earlier forecast of 21 million tonnes and compared with 2018-19 output of 19 million tonnes. The USDA also said wheat planting in 2019-20 is forecast to decrease 5% to 7.235 million hectares. “Alternative crops, orchard development, greenhouse development, and increased vegetable production due to new irrigation areas are increasing their share of farm area every year in Turkey, which reduces wheat planted acreage,” the agency noted. “Winter wheat planting, which finished in October 2018, was nearly 380,000 hectares below the previous year, mainly due to competition with barley in unirrigated areas, as well as other products differing by region.” The USDA said May was the second driest month of May in the past 20 years in terms of rainfall.
French Grain Alliance Set for Battle with Black Sea Wheat
Reuters – 07/21/2019
A French export alliance of grain cooperatives to take on the challenge of Black Sea supplies may not be enough to stop the EU’s top exporter losing the vital Algerian market to Russian wheat, traders and analysts said. The unveiling this month of Grains Overseas, an unprecedented alliance in which InVivo, Axereal and NatUp will combine soft wheat and feed barley exports outside the European Union, is a response to booming Russian and Ukrainian shipments. Russia’s rise to become the world’s biggest wheat exporter has reduced French sales in importing countries like Egypt and Morocco, making France more reliant on Algeria, whose tender requirements effectively preclude Russian wheat. In the 2018/19 season to June 30, France shipped close to 10 million tonnes of soft wheat outside the EU, compared with 12 million-plus levels seen earlier this decade.
Russian exports fell back from a record-breaking 2017/18, but at 36 million tonnes held well above an EU total of 21 million. Grains Overseas, which will involve the merging of trading desks and joint procurement, is aimed at maintaining large volumes of French grain in North Africa while avoiding financial losses that have hurt trading desks in recent years.
Chinese Companies Looking to Buy U.S. Farm Products
Reuters – 07/21/2019
Some Chinese companies are seeking new purchases of U.S. agricultural products, China’s official Xinhua news agency said on Sunday, citing authorities, as Beijing and Washington look for ways to end a protracted trade war. U.S. President Donald Trump and Chinese President Xi Jinping agreed at last month’s G20 summit in Osaka to restart trade talks that stalled in May. Trump said at the time he would not impose new tariffs and U.S. officials said China agreed to make agricultural purchases. But Trump said on July 11 that China was not living up to promises to buy U.S. farm goods. Chinese businesses have made inquiries with U.S. exporters to buy crops and agricultural products and applied for the lifting of tariffs, Xinhua said, citing Chinese authorities. China’s Customs Tariff Commission will arrange for experts to appraise the Chinese companies’ tariff exclusion applications, Xinhua said. “Relevant Chinese departments expressed hope that the United States would meet China halfway, and earnestly implement the United States’ relevant promises,” the news agency said, without elaborating.
2019 Spring Wheat Tour Preview: After a Rought Spring, What Will Scouts See?
The Progressive Farmer – 07/22/2019
The 2019 Wheat Quality Council Hard Red Spring and Durum Wheat Tour will begin and end in Fargo, North Dakota, with scouts gathering Monday, July 22, in the evening and then heading out to check fields July 23 through the morning of July 25. Similar to last year, day one will cover the southern half of North Dakota, southwestern Minnesota and northeast/north-central South Dakota. Day two will cover northwest and north-central North Dakota, with day three covering north-central/northeast North Dakota and northwest/west-central Minnesota. Dave Green, executive vice president of the Wheat Quality Council, told me that the tour route would remain mostly the same and that he has 62 scouts this year versus 56 in 2018. “I am expecting an above average crop,” said Green. According to the North Dakota Wheat Commission’s (NDWC) crop progress comments for the week ended July 14, development of the crop remained behind normal in all states with the exception of Minnesota. In Minnesota, 96% of the crop was headed, slightly ahead of the average of 91% for mid-July. North Dakota was 79% headed, South Dakota 75% and Montana 60%. A recent stretch of high temperatures — upper 80s to lower 90s — helped accelerate crop maturity some, which should be reflected in the July 22 report and will likely be seen by tour scouts.
Source: U.S. Wheat Associates