A blast of Arctic air covered much of the United States earlier this week, sending temperatures plunging across key wheat areas that have seen limited snowfall this winter.

Without that protective layer of snow, winter wheat was vulnerable to freeze damage or “winterkill” as temperatures fell to or below minus 5 degrees Fahrenheit (minus 21 Celsius), said Joe Woznicki, an agricultural meteorologist with the Commodity Weather Group.

Those conditions impacted about 65 per cent of the nation’s total hard red winter wheat belt on Tuesday from Montana down through northern Texas, including parts of top producer Kansas.

This week’s polar vortex may also have affected about 35 per cent of the soft red winter wheat belt, including Illinois, Indiana, southern Michigan and Ohio.

Hard red winter wheat is grown in the Plains and used to make bread. Soft red winter wheat is produced in the Midwest and used in cookies and snack foods.

“If all the wheat was well-established, you would expect losses of about 10 per cent in spots that saw winterkill,” Woznicki said, cautioning that “these are very rough estimates.”

Losses might be closer to 15 per cent in areas where wheat crops were poorly established or where dry soils left plants more vulnerable to the cold, he said.

How much crop ultimately will be lost is not yet known. Freeze injury to winter wheat is notoriously difficult to assess until dormant crops resume growth in the spring.

But using last year’s production figures for wheat harvested in 2024 as an estimate, a 10 per cent loss on 65 per cent of the hard red winter acreage works out to 52 million bushels, or 6.7 per cent of the crop, CWG said.

A 10 per cent loss on 35 per cent of the soft red wheat acreage would be 12 million bushels, or 3.5 per cent of production.

U.S. farmers planted 34.1 million acres of winter wheat for harvest in 2025, up two per cent from the prior year. The United States is the world’s No. 5 wheat exporter.

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Corn futures were narrowly mixed on South American weather and light spillover pressure from soybeans, while wheat was mostly lower amid ample global supplies.

A firmer U.S. dollar anchored grain markets in general as a stronger greenback makes dollar-denominated commodities costlier for those holding other currencies.

Chicago Board of Trade January soybeans ended down 4-1/4 cents at $9.85-1/4 a bushel and March corn was down 1/2 cent at $4.32-1/2 a bushel. CBOT March wheat fell to a three-month low but ended down 3/4 cent at $5.47-1/4 a bushel.

Soybean futures were pressured by abundant U.S. supplies and by updated Brazilian crop harvest forecasts suggesting the upcoming harvest there will shatter previous records.

Brazil’s Agroconsult on Thursday raised its harvest outlook to 172.2 million metric tons, nearly 10 million tons above the 2022/23 season record. Agribusiness consultancies Celeres and StoneX also raised their crop estimates to fresh records on Monday.

“There’s no shortage of beans in the U.S. or in South America, with a crop coming at us,” said Don Roose, president of U.S. Commodities.

Traders shrugged off another U.S. Department of Agriculture announcement of soybean sales to China on Monday, the latest in a string of purchases by the top importer. The recent deals were seen as routine U.S. soy purchases ahead of Brazil’s peak export season.

U.S. wheat remained under pressure as competition from cheap Argentine and Black Sea wheat outweighed a decision by Russia to cut its 2025 wheat export quota by two-thirds and raise wheat export duties. Most deferred-month contracts posted fresh lows on Monday.

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The projected ending stocks for Brazilian corn were raised 200,000 tonnes from the February estimate at 6.17 million, which could bring more pressure to already beleaguered U.S. corn futures. While the carryout into 2023-24 was adjusted higher by 1.2 million tonnes at 11.47 million, domestic feed use increased by one million tonnes at 64.5 million. Production remained unchanged at 124 million tonnes.

In Argentina, ending stocks remained at 1.03 million with production and exports each going up one million tonnes at 56 million and 42 million, respectively.

Brazilian soybeans saw a marked reduction in projected ending stocks for 2023-24, losing 3.25 million tonnes at 33.05 million. Exports increased by three million tonnes at 103 million, while production was down one million tonnes at 155 million and domestic crush was cut by 750,000 tonnes at 53 million. In Argentina, production remained the same at 50 million tonnes with ending stocks unchanged at 25.96 million.

U.S. wheat saw its 2023-24 estimated carryout rise by 15 million bushels at 673 million, due to an equivalent reduction in exports to 710 million. Production was unchanged at 1.812 billion bushels.

U.S. corn saw no changes from its February estimates, with production remaining at 15.342 billion bushels and ending stocks at 2.172 billion. U.S. soybean production and ending stocks were also unchanged at 4.165 billion and 315 million bushels, respectively.

Projected global ending stocks for 2023-24 corn were cut by 2.43 million tonnes from the February estimate at 319.63 million. Beginning stocks were raised 1.37 million tonnes at 301.62 million, but production fell by 2.33 million at 1.230 billion and domestic use increased by 1.48 million at 1.212 billion.

World ending stocks for soybeans dropped by 1.76 million tonnes at 114.27 million. Beginning stocks were also down by 1.42 million tonnes at 102.15 million and production was cut by 1.36 million tonnes at 396.85 million.

Projected world wheat ending stocks declined by 610,000 tonnes at 258.83 million. Beginning stocks were down by 110,000 tonnes at 271.1 million, but production is set to rise by 960,000 tonnes at 786.7 million.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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They expected an announcement at last week’s 2024 Commodity Classic convention, the annual gathering of U.S. corn, soybean, wheat and sorghum growers.

But that didn’t happen. U.S. secretary of agriculture Tom Vilsack told growers the government needs more time to sort things out.

He said the announcement will come in a matter of weeks rather than months.

Vilsack did deliver some good news for growers.

“I’m confident now that indeed the GREET model will be part of the guidance that will be provided by Treasury,” he said.

GREET is an acronym for the Argonne National Laboratory’s Greenhouse Gases, Regulated Emissions and Energy Use in Transportation lifecycle model for assessing greenhouse gas emissions.

It is a model developed by the U.S. Department of Energy.

American corn farmers are relieved that GREET will be one of two models available for determining which feedstocks are eligible for the lucrative SAF tax credits contained in the U.S. Inflation Reduction Act.

The other model is the European International Civil Aviation Organization (ICAO) model.

“Corn would never qualify under that model,” said Harold Wolle, president of the National Corn Growers Association.

“That’s why we’re supporting the GREET model.”

There is a lot at stake because the SAF tax credit amounts to US$1.25 per gallon for each gallon of SAF in a qualified mixture.

The U.S. government has set a target of having three billion gallons of domestic SAF production by 2030, up from 10 million gallons today.

Most of the biofuel buzz in agricultural markets has surrounded soybean oil being used to make renewable diesel.

However, Wolle said the SAF market for corn ethanol could be massive as well.

He noted that corn ethanol is selling for about $1.50 per gallon in the U.S. versus the typical gas price of $3 per gallon, so it is a very competitive fuel on its own accord.

Soybean-based renewable diesel is far more expensive than conventional diesel by comparison, so it is a market that is completely reliant on tax credits.

Wolle also noted that it takes about 1.6 to 1.7 gallons of ethanol to make one gallon of jet fuel, so that three-billion-gallon market for SAF is even bigger than it sounds.

Vilsack said he is keen on ensuring that as many feedstocks as possible qualify for SAF production.

He said it took a lot of convincing by him and others to ensure that the SAF Interagency Working Group understood the importance of embracing the GREET model.

The next step is ensuring that the working group uses the most current data to make sure the GREET model concludes that corn ethanol meets the threshold of reducing lifecycle GHGs by at least 50 percent.

“It’s complicated and we’re working through it,” Vilsack told reporters following his speech to delegates.

Wolle said the U.S. corn industry desperately needs a new source of demand because right now there is too much supply of the crop, which is causing prices to crash.

“It’s the bright, shiny light on the horizon,” he said.

“We need to have more usages for corn.”

That is why he wants Vilsack and other government leaders to get it right rather than rushing the decision.

—Sean Pratt writes for the Western Producer.

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“Yields are the big driver of this whole thing,” stated MarketsFarm analyst Bruce Burnett.

The initial projections from the USDA were based on economic models, past data, weather patterns, and essentially the department’s best estimate. The USDA is scheduled to issue its farmer survey-based projections for 2024/25 at the end of March.

For soybeans, the USDA forecast the national yield to reach 52 bushels per acre in 2024/25, up from the current year’s 50.6. Planted acres were set to rise to 87.5 million compared to 83.6 million in 2023/24, with harvested acres rising to 86.6 million from 82.4 million. That would boost production to 4.505 billion bushels from 4.165 billion.

Total domestic use for U.S. soybeans was projected to bump up to 2.525 billion bushels in 2024/25 from this year’s 2.424 billion. Exports as well are to improve to 1.875 billion bushels from 1.720 billion. That’s to see ending stocks jump to 435 million bushels from 315 million in 2023/24.

As for U.S. corn, the USDA forecast yields to rise to 181 bu./ac. in 2024/25 from 177.3. Planted acres were dropped to 91.0 million from this year’s 94.6 million. Harvest acres fell to 83.1 million from 86.5 million. With that reduced area, production was forecast to slip to 15.040 billion bushels from 2023/24’s 15.342 billion.

At 12.555 billion bushels, total domestic use was nudged up from this year’s 12.455 billion. Exports were little changed with 2.150 billion bushels in 2024/25 from 2.100 billion. This is projected to push up ending stocks to 2.532 billion bushels from 2.172 billion.

U.S. wheat was set to see reduced planted acres in 2024/25 at 47.0 million versus 49.6 million. However, harvested acres are expected to increase to 38.4 million from 37.3 million. Yields were set at 49.5 bu./ac. compared to this year’s 48.6.

There’s to be a slight decrease in wheat’s total domestic use at 1.134 million bushels, from the 1.144 billion in 2023/24. Exports for the coming year were pegged at 775 million bushels versus 725 million. The carryout is to grow to 769 million bushels from 658 million.

“That’s pretty big yields in terms of corn and beans,” commented Burnett, noting the overall effect of the Outlook Forum’s report was bearish.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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According to the first outlook for the marketing year from the U.S. Department of Agriculture, total world wheat production for 2021-22 is forecast to hit a record 789 million tonnes, which would compare with the 776.1 million tonnes grown the previous year.

Total world wheat usage is forecast to increase by eight million tonnes on the year, leaving world ending stocks of 295 million tonnes, only up slightly from the 294.7 million-tonne projected wheat carryout for the current marketing year, USDA said in its world agricultural supply and demand estimates (WASDE) on Wednesday.

Of the totals, U.S. wheat production in 2021-22 is forecast at 51 million tonnes, which would be up from 49.7 million tonnes the previous year. Wheat class estimates will be released in July.

USDA forecast Canada’s wheat crop at 32 million tonnes, which would be down from the 35.2 million tonnes grown the previous year.

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Winter wheat, seeded in the Northern Hemisphere in autumn for harvest in June, is the first cash crop to be planted since an agricultural commodity price rally began in August. The rally is a welcome relief for farmers after four years of global surplus grain stocks that have kept prices low and hobbled the U.S. agricultural economy.

Tightening grain supplies and demand from China have lit a fire under Chicago Board of Trade corn, soy and wheat futures. CBOT soybeans are at a four-year high and wheat is near a six-year top at around US$6 a bushel. The U.S. Agriculture Department (USDA) says there could be record acreage of all major U.S. crops next year.

David Justison, a third-generation farmer who grows wheat, corn and soybeans in Montgomery County in south-central Illinois, planted 1,200 acres of winter wheat this autumn, up from 900 acres last year.

“It’s the best price I have seen in a few years. Six-dollar wheat is something that got my attention,” Justison said.

USDA this month projected U.S. total wheat seedings for 2021, including winter and spring wheat, at 46 million acres, up from 44.3 million acres in 2020-21.

Additional U.S. wheat would help meet export demand after countries around the world stocked up on grains to ensure food supplies during the COVID-19 pandemic, and ensure flour for baked goods and pastas next year.

Domestic demand for wheat and flour has held roughly steady from a year ago, USDA data shows, even as the pandemic sent millers and bakers scrambling to adapt to consumers eating more meals at home instead of dining out. Grocery stores faced flour shortages this spring due to an uptick in demand for small bags of flour for home baking.

The U.S. government will not release a farmer survey specifically on winter wheat plantings until January. But private analytics firm IHS Markit Agribusiness this month forecast U.S. winter wheat plantings were 31.5 million acres, up 3.6 per cent from the 30.4 million acres seeded a year ago, according to an IHS client note seen by Reuters.

U.S. wheat export sales commitments for the 2020-21 marketing year begun June 1 are up 10.5 per cent as of Nov. 12 from a year ago. China, an irregular U.S. wheat buyer, has booked 1.7 million tonnes of U.S. wheat, up from 194,063 tonnes last year.

The sorghum option

While plantings expanded in Plains states like Kansas, the top U.S. grower of the hard winter wheat needed for bread, the size of the crop ultimately may be limited by dry conditions.

But Plains farmers have another option to turn a profit this year. They could tear up the wheat crop and plant sorghum, a drought-tolerant grain planted in the spring that is used as an alternative feedstuff to corn and is seeing strong demand from China.

Sorghum, also called milo, is grown in Plains wheat states including Kansas, Oklahoma and Texas. Cash prices have been historically high in recent weeks, reflecting robust export demand from China. U.S. sorghum sales commitments to China totaled three million tonnes as of Nov. 12, up from 123,000 tonnes from this time last year.

“If we do see wheat ground that is not planted right now, or if it has a poor stand going into the winter, it’s easy to see acres get plowed up and shift from wheat to milo,” said Mike O’Dea with StoneX Ltd, a commercial grain broker.

The export market for sorghum is dominated by China, which uses it for animal feed and baiju liquor. China has been a huge importer of corn, sorghum and other grains in recent months as it fights food inflation and rebuilds its massive hog herd following a devastating swine disease. Unlike corn, China has no low-tariff quota on sorghum imports.

“Sorghum … is helping a lot of people get back into decent shape, fiscally speaking,” said Wayne Cleveland, executive director of Texas Sorghum Producers, an industry group.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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China bought 1.5 million tonnes of wheat from Canada from August 2018 through April 2019, nearly double the pace a year earlier and the most since 2004-05, according to Canadian Grain Commission data.

China’s brisk wheat buying from Canada, even as it refuses canola and detains two Canadian citizens, shows that supply and demand, not just politics, factor into that diplomatic dispute.

Canada and the United States are the two biggest suppliers of high-protein wheat, which provides the gluten strength necessary for baking. Australia’s high-protein wheat has suffered from drought.

“If they need the protein, they probably need to come to Canada, rather than the U.S.,” said a Canadian wheat exporter. “It’s not easily replaceable.”

China imposed a 25 per cent tariff last year on U.S. wheat in a trade war with the United States, effectively halting sales and shipments to what was the fourth largest U.S. export market the previous season for high-protein U.S. hard red spring wheat.

This year, China halted imports of Canadian canola, citing pests in some shipments, shortly after Canadian police arrested an executive with Chinese telecommunications company Huawei Technologies at the request of the U.S.

“China is just not buying wheat from the U.S. because of this trade spat,” said Terry Reilly, senior commodities analyst with Futures International. “I don’t see China returning as a major importer of U.S. wheat unless the trade war gets completely settled.”

The 42,000 tonnes of U.S. wheat exports to China so far this year as of April are the lowest in 11 years, according to U.S. Census Bureau trade data. China did not purchase any U.S. wheat in May, U.S. Department of Agriculture data showed.

May and June Canadian sales to China, which are not yet captured by government data, have continued but at a slower pace, a second Canadian exporter said. The uptick to China comes as Canadian farmers struggle with dry conditions this spring, following a year of depressed incomes.

“Any extra sale is critical this year. That gives us some optimism,” said Jim Wickett, a Rosetown, Sask. farmer and chairman of Western Canadian Wheat Growers.

China’s buying makes it Canada’s second-biggest foreign wheat market this year, after Indonesia, accounting for 11 per cent of total exports. It comes as Canadian Prime Minister Justin Trudeau said he was concerned that China could broaden its crackdown on Canada’s exports.

–– Reporting for Reuters by Rod Nickel in Winnipeg and Karl Plume in Chicago.

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“(W)e need to have public consultations to figure out the consequences of adding more American grain to our system,” Sask Wheat chair Bill Gehl said in a news release June 5. “I think producers need to know what the ramifications to our shipping agreements would be and how American grain will fit under the MRE (maximum revenue entitlement).”

The U.S. government and U.S. Wheat Associates, which represents U.S. wheat farmers, say Canada’s wheat grading system is a non-tariff trade barrier because it  discriminates against U.S. wheat.

The Western Canadian Wheat Growers Association (WCWGA) and Cereals Canada agree and have been asking the Canadian government to amend the Canada Grain Act so wheat grown in the U.S. and sold in Canada is eligible for a CGC trade, so long as the variety is registered to be grown in Canada.

Both groups worry without a change the Trump administration, already a critic of the North American Free Trade Agreement (NAFTA), will try to block imports of Canadian wheat. The U.S. is an important market for Canadian wheat.

Currently under the Act, unregistered wheat delivered to a CGC licensed grain elevator is only eligible for the lowest grade in the intended wheat class, whether it was grown in Canada or the U.S.

This spring Montana Democratic Senator John Tester moved a resolution stating Canada should grade Canadian and U.S. wheat the same way and that the president should examine whether Canada’s grading laws adhere to trade agreements and “insist on full access for United States exporters of wheat to the Canadian market.”

“We should be changing the Act to allow that to happen,” Cereals Canada president Cam Dahl said in an interview April 27.

The CGC and federal government say U.S. wheat can legally be delivered and sold in Canada to willing buyers based on specifications.

“There’s nothing in the current (Canadian) grain-handling system that prevents U.S. producers from entering into contracts with grain-handling companies or processors located in Canada to get a fair price for the quality of the product being delivered on the basis of specs,” CGC spokesman Remi Gosselin said April 26 in an interview.

The WCWGA and Cereals Canada agree, but say since the U.S. see this as a trade irritant, it needs to be addressed to protect Canadian wheat exports to the U.S.

The previous government had planned to do just that, but twice, the changes, along with other amendments to the Act, didn’t make it through the legislative process.

Sask Wheat said the Canadian government needs to “protect the interests of Canadian grain producers and the integrity of the Canadian grain system.”

Any changes to the Act must ensure the quality of Canadian wheat for end-users, Sask Wheat said.

Canadian wheat has a reputation for high quality and consistency. Canada’s registration system, which requires new wheat varieties be tested to ensure they meet the quality standards of the intended class, and the CGC’s grading system, are part of Canada’s wheat quality control system and supported by Sask Wheat.

“Before we make any legislative changes, we should know how this will impact Canadian producers and our relationship with our top export markets,” Gehl said.

“Also, would allowing more American grain create the potential for railways to use American grain over Canadian to achieve volumes? There are a lot of important questions that need to be addressed. We need to resist the pressure from the United States and do what is right for Canadian grain farmers.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Follow him at @AllanReporter on Twitter.

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“The trend certainly hasn’t been positive,” said market analyst Bryan Strommen of Progressive Ag in Fargo, N.D. He cited improving U.S. winter wheat conditions, favourable weather forecasts, the fast spring wheat planting pace, cheap foreign competition, and talk that Russia will soon end its wheat export tax, as some of the bearish influences overhanging the wheat market.

Chart signals are also pointing down, as speculators add to their large short positions, he added.

Wheat futures were “trying to find a bottom,” he said, but added that the bottom could be another 20 cents or more lower in Minneapolis spring wheat.

The Minneapolis July spring wheat contract settled Tuesday at US5.2475 per bushel, which represents a five-year low on the monthly charts.

That large fund short position does have the potential to fuel a correction higher, if something comes forward to provide the catalyst for a short-covering bounce, said Strommen.

Issues with the U.S. winter wheat crop could be somewhat supportive, as early reports from a crop tour of Kansas going on this week are “all over the board,” said Strommen.

Dryness in the U.S. northern Plains could also become a concern for the spring wheat market, if there are not timely rains later in the growing season.

“We’re a long way from the combine,” said Strommen, adding that it will become more of a weather market moving forward. “If we don’t have any issues and have a good crop, we’ll have a challenge ahead of us to get it sold and create some demand around the world.”

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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