We hope you enjoy this week’s edition of KAWG E-News.
President Schemm Hits the Hill
Following Commodity Classic, newly elected President David Schemm ran home to Kansas briefly to do a day of field work before hitting the road again to Washington, D.C., for a couple of days of meetings. With the start of the 115th Congress, there are several new Members of the House Agriculture Committee. Schemm and NAWG staff visited several of those offices to provide them information about NAWG and wheat generally, as well as to discuss the current difficult economic conditions in wheat country and the associated need for maintaining a strong Farm Bill. NAWG is holding these meetings in order to develop relationships early on with new offices ahead of the Farm Bill reauthorization process.
K-State Research and Extension Wheat Diesease Identification Booklet
From K-State Research and Extension
A revised version of this pictorial guide to wheat diseases is now available here:
First hollow stem update: March 8, 2017
Cattle should be removed from wheat pastures when the crop reaches first hollow stem (FHS). Grazing past this stage can severely affect wheat yields (for a full explanation, please refer to eUpdate article “Optimal time to remove cattle from wheat pastures: First hollow stem”.
First hollow stem update
In order to screen for FHS during this important time in the growing season, the K-State Extension Wheat and Forages crew measures FHS of 20 commonly grown wheat varieties and experimental lines in Kansas. The varieties are in a September-sown replicated trial at the South Central Experiment Field near Hutchinson, in cooperation with Gary Cramer, Agronomist-in-Charge of the Field. (Read more.)
NAWG Weekly Update
NAWG Completes Successful Commodity Classic, Elects New Officer Team
Last week NAWG held its annual meeting as part of Commodity Classic, a trade show featuring NAWG, the National Corn Growers Association, the American Soybean Association, the National Sorghum Producers, and the Association of Equipment Manufacturers. As part of Commodity Classic, NAWG held its own board meeting. The conference included meetings of the Research & Technology Committee, the Environment and Renewable Resources Committee, and the Domestic and Trade Policy Committee.
The Committees held their annual policy resolution review. NAWG’s bylaws require resolutions to be reviewed every three years; if resolutions are not proactively renewed by the board, they are automatically set to sunset. Additionally, the Committees debated Farm Bill priorities which were ultimately adopted by the full board of directors. Summaries of the Committee meetings are below.
In addition to the trade show and NAWG’s own conference, NAWG held a reception to recognize the 2016 winners of the National Wheat Yield Contest as well as a reception to honor outgoing President Gordon Stoner and an auction to raise funds for NAWG’s WheatPAC. For information about the 2017 National Wheat Yield Contest, visit https://yieldcontest.wheatfoundation.org.
During NAWG’s board meeting the directors also elected a new officer team. Kansas farmer David Schemm was elected President; Oklahoma farmer Jimmie Musick was elected Vice President; Texas farmer Ben Scholz was elected Treasurer; Michigan farmer David Milligan was elected Secretary; and Montana farmer Gordon Stoner was elected Past President.
Domestic and Trade Policy Committee
NAWG’s Domestic and Trade Policy Committee has jurisdiction over a wide range of topics. This meeting primarily focused on reviewing expiring policy resolutions, considering new policies, and debating NAWG’s Title 1 and crop insurance priorities in the upcoming Farm Bill reauthorization process, as well as trade policy. The Committee also discussed NAWG’s ongoing work to identify ways to address problems associated with quality discounts.
Environment and Renewable Resources Committee
The NAWG Environment and Renewable Resources Committee also reviewed expiring policy resolutions and new resolutions brought before the committee. Members also participated in a discussion of conservation priorities for the 2018 Farm Bill. The Committee, and subsequently the Board, approved new resolutions related to the operation of NRCS conservation programs and exempting conservation payments from System for Award Management (SAM) requirements.
Research and Technology Committee
The Research and Technology Committee was briefed with an update on the National Wheat Improvement Committee Fly In, which will be held March 19-21. There is a full slate of attendees for the fly in to DC, comprised of farmers and wheat researchers, scheduled to advocate for continued research funding through the USDA. There is a strong list of experts coming in for the fly-in for Hill visits to stress importance of wheat research.
Also, the Committee was updated on the status of the National Wheat Yield Contest and award ceremony for the 2016 national winners. The contest basically remains the same as the first year, with the rules committee reviewing the potential to add a quality testing component into the contest.
After industry partner updates, the Committee reviewed all its technology policy resolutions previously approved that were nearing “sunset” status. These resolutions were either renewed or amended if still relevant, or left to expire if no longer appropriate. Noteworthy was the addition of two NEW policy resolutions approved to support research aimed at improving quality assessment around wheat starch or Falling Number (FN). The Pacific Northwest (PNW) wheat industry has suffered from repeated wide-spread financial losses due to weather-induced problems resulting in poor end-use quality as measured by low FN. The FN test detects starch degradation due to alpha-amylase enzyme activity and perhaps other unknown factors in wheat flour. Low FN indicates the presence of too much alpha-amylase enzyme in the flour, leading to problems with poor quality baked goods. The Committee approved resolutions to support genetic research to reduce the risk of FN as well as a resolution to develop a more consistent, reliable test method.
House Agriculture Committee Keeps Full Schedule
The House Agriculture Committee is keeping its plate full through the month of March. On Tuesday, February 28, 2017, the Subcommittee on Livestock and Foreign Agriculture held a hearing to examine international market development programs. During the hearing the Subcommittee heard from Dr. Gary Williams from Texas A&M University who discussed his recent study about the economic impact of the Market Access Program (MAP) and Foreign Market Development (FMD) program.
On Thursday, the Subcommittee on Commodity Exchanges, Energy, and Credit held a hearing to review USDA’s rural development and energy programs. And next Wednesday, the full Committee will hold a hearing to discuss the possible opportunities for rural America that could result from potential tax reform. Visit the House Agriculture Committee’s website for more information.
Market Analysis: Bullish Wheat Traders Go Back Into Hiding
Larry Glenn, market analyst for Frontier Ag, Oakley and Leffler Commodities, Augusta, provides market analysis for KAWG members. E-mail Larry at email@example.com.
It was a rough week for the wheat price as bullish traders exited long positions which they had been defending in the last few weeks. Not only did the technical turn bearish, the updated balance sheet for the wheat failed to supply friendly news. The positive for the wheat price is the weather condition but this factor is a “known” for the wheat traders.
The May Kansas City wheat chart illustrates the bearishness according to technical indicators. The lines on my trend indicator cross again to the down side. Friday’s closing price was below the 50 day moving average. Many technical traders that are trend followers use a moving average around the 50-day. The last reaction low was exceeded on Friday.
The USDA updated their number on the supply and demand balance sheet. Because of a decrease in wheat imports, the ending stock number for the United States supply and demand sheet dropped 10 million bushels. On the world report, the USDA increased wheat ending stocks to 249.94 million metric tons. This is a new record for world ending stocks. Wheat production increased for Argentina and Australia as expected.
Weather conditions are the positive for wheat price and a negative for wheat production. Dry conditions persist across our southern plains. There is some moisture on the radar for this weekend but favors the far eastern section of this area. Dryness returns to the forecast next week. The 11 to 14 day forecast has a hint of moisture. On Monday, wheat traders will examine the weather updates for a confirmation and a timeline.
For wheat producers, there remains time to price wheat. We have 30 to 60 days of important weather ahead of us to affect the size of our winter wheat crop. Wheat producers should be prepared to take action on rallies this time of the year.
PLEASE NOTE THAT THERE IS AN INHERENT RISK OF LOSS ASSOCIATED WITH TRADING FUTURES AND OPTION CONTRACTS EVEN, WHEN USED FOR HEDGING PURPOSES. PLEASE CAREFULLY CONSIDER YOUR FINANCIAL CONDITION BEFORE INVESTING IN FUTURES AND OPTION CONTRACTS. FUTURE’S TRADING IS NOT SUITABLE FOR ALL INVESTORS. OPTIONS CAN AND DO EXPIRE WORTHLESS. IF YOU PURCHASE A COMMODITY OPTION, YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MOST CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED IN THE PAST SEVERAL YEARS. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A PROFITABLE TRANSACTION AS FEES AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY AFFECT THE RESULTS.
Kansas Wheat Staff
Source: Kansas Association of Wheat Growers