Market Matters Blog
Katie Micik DTN Markets Editor

Friday 05/31/13

More Countries Back Away from U.S. Wheat

There are a lot of mysteries around why and how glyphosate resistant wheat showed up in an Oregon field nine years after Monsanto stopped testing it. One thing has always been clear: consumers are wary of eating a genetically engineered grain directly. Pass it through the digestive tract of a cow, chicken or hog, okay. Bake it into our bread or noodles, no way.

(Worth noting that our own Food and Drug Administration has said that genetically engineered wheat is safe to eat, but consumers don't always see it the same way. Here's the link: http://1.usa.gov/…)

However, the market seems hardly to notice that something could be trimming the demand side of the ledger. All three wheat futures markets ended the day higher, with the July Chicago wheat contract closing up 6 3/4 cents. The cash market was a different, with bids for soft white wheat at the PNW for June delivery down 18.25 cents.

"Because 45% of U.S. wheat production goes to export, it is surprising that all wheat prices are not being scared lower by the discovery of GMO wheat in Oregon. To the market’s credit, it looks like this is being seen as a short-term problem; not a long-term international rejection of U.S. wheat," DTN analyst Todd Hultman said.

More news came this morning that South Korean flour mills will suspend purchases until further tests are performed on arriving shipments of U.S. wheat. The South Korans expect the results of their tests in early June, Dow Jones Newswires reports. South Korea purchased roughly half of its total wheat needs from the U.S. last year, about 1.2 million metric tons.

Taiwan, which imports about 1.1 mmt annually, also said it will review shipments.

The European Union's customer protection office has urges its 27 member states to test wheat shipments for the presence of the trait.

The trouble with increasing testing is that the commercial test that works for other GE crops isn't reliable for wheat. Here's what Monsanto said in a statement about how to test for the biotech trait in wheat: "The necessary testing requires sophisticated methods, considerable expertise and meticulous laboratory techniques to generate reliable results. Commercial test strips, which are used to detect the presence of glyphosate tolerance in soybeans, canola, cotton and sugar beets, generate a very high incidence of false positive detections (greater than 90 percent) and are not reliable for wheat."

We don't know what tests the Koreans or Taiwanese or Europeans will use to check for the presence of genetically engineered traits, but I hope it's the longer laboratory format. The fact that South Korea said it expects results in mid-to-early June indicates that's the route they're going. Last thing the U.S. wheat industry needs is a lot of false positives.

"The more practical solution for easing consumer worries points to testing. If a reliable quick test for genetically modified wheat traits could be developed (and that may not be easy to do), this issue would be over and that may be one reason why wheat prices have not overreacted to the news," Hultman said. "September Minneapolis wheat, in fact, is showing bullish price behavior in spite of this bearish news, with greater concerns about planting problems in North Dakota. Overall, it is impressive how wheat prices are holding steady this week in spite of the bearish news from Oregon."

(ES/CZ)

Posted at 5:18PM CDT 05/31/13 by Katie Micik
Comments (2)
we were way better off before gmo's we had bees you never heard of type 2 diabetes or all the allergies which are common today and rural America was full of kids growing up on farms. It don't matter how much technology you have if god almighty aint on your side your going to go hungry
Posted by Unknown at 10:57AM CDT 06/01/13
Type 2 diabetes is probably caused more by eating junk food, and no exercise brought on by playing video games. Allergies can be triggered by many things. And apparently god almighty 'ain't' on the side of the millions of hungry people worldwide.
Posted by Steve Simons at 5:37PM CDT 06/05/13
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
April  2014
S M T W T F S
      1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30         
Subscribe to Market Matters Blog RSS
Recent Blog Posts
  • Railroad Delays Interrupt Field Work
  • Regulators Are People, Too
  • Observations of a Weary Traveler
  • Baseball Season Opens, But River, Head of Lakes Grain Season Still on Break
  • Overbooked China Diverts Shipments to the U.S.
  • Parts of Ag Confidence Index Show Correlation to Corn Prices
  • Ag Confidence Index Foreshadows Things to Come
  • Rail Service Slow to Recover
  • CME Shifts to Variable Daily Limits
  • Intuitive, with the Potential for Confusion
  • Mom, the Mini-Wheats!
  • Crimea River: Rumblings of War in the Grain Markets
  • One Cancellation Down, How Many More to Come?
  • Can Crop Insurance Guarantees Sway Acreage?
  • PED Virus Could Trim Corn Consumption
  • Barge, Rail Logistics Still Plagued By Snow, Ice
  • Prepare for a Data, Demographic Deluge
  • Let the Acreage Debate Begin
  • Mother Nature Still Affecting River, Rail Logistics
  • Logistics Still a Mess on Rivers, U.S. and Canadian Rails