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By Larry Stalcup, eWheat editor
 “Corn is king and it’s the key to wheat prices.”
Texas AgriLife Extension Economist Steve Amosson’s description of corn as the “gorilla on the block” for grain prices illustrates how much wheat growers depend on what happens in the cornfield, at livestock feeding operations and at the fuel pump.
“Wheat prices are projected at about $7.85 for 2011-2012,” Amosson says. “I don’t think the price in the U.S. will come down because of corn.”
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USDA’s Sept. 30 stocks report indicates that all wheat stored in all positions on Sept. 1, totaled 2.15 billion bushels, down 12% from a year ago. On-farm stocks are estimated at 642 million bushels, down 21% from last September. Off-farm stocks, at 1.51 billion bushels, are down 8% from a year ago. The June-August 2011 indicated disappearance is 720 million bushels, down 2% from the same period a year earlier.
Durum wheat stocks in all positions on Sept. 1 totaled 65.2 million bushels, down 35% from a year ago. On-farm stocks, at 36.4 million bushels, are down 49% from Sept. 1, 2010. Off-farm stocks totaled 28.8 million bushels, down slightly from a year ago. The June - August 2011 indicated disappearance of 22.1 million bushels, down 45% from the same period a year earlier.
Sen. Thad Cochran (R-MS) has announced that he is an original cosponsor on legislation to allow tax-exempt donations to support agricultural research as a means to help keep American agriculture on the forefront of food production breakthroughs.
The Charitable Agriculture Research Act (S.1561) is a bipartisan measure authored by Senate Agriculture Committee Chairman Sen. Debbie Stabenow (D-MI) and Sen. John Thune (R-SD). Following the precedent set by medical research organizations (MROs), the legislation would amend the tax code to allow charitable, tax-exempt donations to agricultural research organizations (AROs).
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By Forrest Laws, director of editorial content
Direct payments appear to be going down for the count and, barring some miracle, will probably not be bouncing back off the congressional canvas this time around.
With congressional leaders and some commodity organizations already backing away from them, last month’s budget proposal announcement by President Obama may have sounded the death knell for the guaranteed annual payments for cotton and grain producers.
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 Kansas State University scientists may be giving wheat growers reason to watch the weather more than they did before in October and, for that matter, in May and June.
The scientists’ sweeping look at 55 years’ worth of historical wheat yield data showed that for every 1-in. increase in October precipitation, dryland wheat yield increased 4-5 bu./acre. For every 1° (F) increase in fall (October or November) temperature, dryland and irrigated wheat yields both decreased about 1 bu./acre.
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From the U.S. Wheat & Barley Scab Initiative
The majority of U.S. wheat- and barley-producing states enjoyed a calm year in terms of Fusarium head blight incidence and severity. But not all. As always, growing season weather played an important role in disease incidence and severity, or lack thereof.
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Scientists with the Weed Science Society of America (WSSA), the American Phytopathological Society (APS) and the Entomological Society of America (ESA) expressed concern about the precarious state of the U.S. Pesticide Safety Education Program (PSEP). Funding for the program has plummeted in recent years and is now in danger of evaporating completely.
As the nation’s primary pesticide applicator training and education program, PSEP is responsible for ensuring the safety of applicators, other workers and the public for protecting the environment and for providing guidance in the proper use and security of pesticides.
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The discovery period for determining projected prices and volatiles for wheat has ended and the Risk Management Agency (RMA) has released these factors, according to the University of Illinois farmdoc. In Illinois and many other Midwestern states, the 2012 projected price for wheat is $8.20/bu. The volatility is 27¢.
The projected price of $8.20 is $1.01 higher than the 2011 price of $7.19. As a result, guarantees will be higher for the same coverage level in 2012 as compared for 2011. For example, farmdoc says for a 75% Revenue Protection (RP) policy for a unit having an Actual Production History (APH) yield of 55 bu., in 2012, the minimum coverage level is $338/acre (75% coverage level x 55 bu. APH x $8.20 projected price).
Farmdoc says the 2012 minimum guarantee is $41/acre higher than the 2011 minimum guarantee of $297/acre (75% coverage level x 55 bu. APH x $7.19 projected price). For the same APH yield and coverage level, 2012 minimum guarantees will be 14% higher than in 2011.
The 2012 volatility of 27¢ is below the 2011 volatility of 32¢, farmdoc says, adding that volatilities are an important factor determining crop insurance premium. All else being equal, the lower 27¢ volatility will lower premium for 2012.
By Shannon Schlecht, U.S. Wheat director of policy
The U.S. government recently took one more step in a long journey toward implementing pending free trade agreements (FTA) with Colombia, Panama and South Korea The U.S. wheat industry is pleased to see this progress, in no small part because we believe trade agreements work for the U.S. economy and for our trading partners.
In the last three months, EU-Korea and Canada-Colombia FTAs entered into force and have unnecessarily disrupted trade with U.S. businesses just as an economic lift is sorely needed. So if sitting on the sidelines has produced nothing else, at least it has helped reveal proof that trade agreements work.
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National Association of Wheat Growers (NAWG) and six other associations representing American farmers wrote the leaders and members of the congressional agriculture committees this week, urging them to press the Federal Communications Commission (FCC) on the importance of both rural broadband and a functional GPS system that allows for precision agriculture.
The FCC is considering a waiver requested by LightSquared, a company with technology that could dramatically expand rural broadband access, but that studies show could also effectively disable GPS systems.
The letter stated that the FCC must ensure that accurate GPS will continue to be available for precision agriculture and also ensure that broadband access be made available for all of rural America. It added that “we support the expanded use of precision agriculture, which allows farmers and ranchers to run more efficient, economical and environmentally conscious operations. Disruption to GPS has the potential to reduce farm and ranch profitability by raising production costs.”
The Corn & Soybean Digest poll looks at various aspects of wheat and other crop production. Please take a minute to take part. The current poll question is: How are your corn and soybeans yielding this harvest? *Excellent! Much better than anticipated. *Average. They're on par with what was expected. *Awful! The growing season sure affected bushels this year.Click below to take the poll.
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"Back to School with Ed Usset" is a popular feature of Corn & Soybean Digest, in cooperation with Ed Usset and the Center for Farm Financial Management, University of Minnesota. Usset’s challenging and authentic quiz questions are designed to test your grain marketing knowledge and will help you learn while having fun! Ed Usset is the author of "Grain Marketing is Simple, It’s Just Not Easy," and is a grain marketing specialist at the University of Minnesota.
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Thanks for taking the time to view eWheat. Look for another issue of eWheat in your email box on Nov. 8. If you have any questions, comments or suggestions on the content of this newsletter, please e-mail your editor Larry Stalcup at beef2lar@suddenlink.net. Also, thanks to our exclusive sponsor, DuPont, for its support of this newsletter.
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