The 16 inxh circular needle is a very short one and it's used to knit the collar or neckband in the round. This is a nice way to finish the collar.
For the back, cast on 74 stitches and work in stockinette stitch (knit one row, purl one row) unti the back measures 24 inches long. That's the equicalent of 61cm. You'll end with a wrong side row (meaning that you're ready to knit on the right side row). Start the row by binding off stitches to shape the shoulders. Don't bind off all the stitches. Start by binding off 22stitches then knit to the end of the row. Next row (WS): BO 22sts, purl to end of row.
Place rem 30 sts on holder for the neck.
Don't worry about slipping the sts to a holder (you can use some scrap yarn for this too), It's like moving stitches from one needle to another without knitting them.
For the size you're knitting (the 3rd size inside the parentheses) the width of the back should be 18 inches). Be sure to knit a gauge swatch so that you get 16stitches in 4inches in stockinette stitch with your needles. See the video here if you need to http://www.knittinghelp.com/video/play/gauge-basics