Food Business News - June 21, 2011 - 58

Ingredient Markets
Market commentary for one-week period ended June 17, 2011

Cash Wheat
HARD WINTER. Premiums on hard red winter wheat in Kansas City were unchanged to 33c a bu higher last week. Advances across the bottom half of the protein scale reﬂected mill efforts to keep wheat ﬂowing into the spot market while harvest progress across Kansas was slowed because of rain. Railroads were slipping behind schedules in placing rail cars and completing shipments of contracted wheat, which sustained interest in procuring ﬁll-in supply from the spot market, even if that meant limited double-buying. The wide gains at 12.6% and 12.8% protein narrowed the basis spread between wheat with those proteins and higher-protein supply. High-protein hard winters, while unchanged for the week, remained historically strong amid solid demand from millers seeking to substitute hard winter wheat for spring wheat with equivalent protein in certain blends. The price spread between hard spring wheat and hard winter wheat encouraged such substitution as did persistent difﬁculties in securing spring wheat amid chronic shipping delays that were made even worse by ﬂooding along the Missouri river and its tributaries. The Kansas wheat harvest was off to an early start, but rain slowed progress in central and eastern portions of the state after midweek. The winter wheat harvest by June 12 was 11% completed in Kansas (5% as the 2006-10 average for the date), 83% in Oklahoma (43%) and 46% in Texas (35%), according to the U.S. Department of Agriculture. Winter wheat condition improved in most states where all or most of the crop remained to be harvested. Rated good to excellent by the U.S.D.A. as of June 12 was 18% of the crop in Kansas (52% poor to very poor), 40% in Colorado

(25% poor to very poor), 83% in South Dakota (15% fair), 58% in Nebraska (30% fair) and 67% in Montana (27% fair). Merchandisers noted good test weights, better-than-expected yields, higher protein but smaller berry size as wheat qualities seen in the early Kansas harvest. Kansas farmers to date were tight holders of harvest wheat. Once the harvest extends above I-70 in that state, there will be more certainty over what average crop protein likely will be, and producers may increase sales. Protein was expected to fall from the early harvest results as combines work their way into ﬁelds that were not so severely stressed by dry conditions. HARD SPRING. Premiums on hard red spring wheat quoted as delivered Chicago/ beyond values relative to the Minneapolis September wheat future were 70c a bu higher to 175c lower last week. Wide losses were sustained across most of the protein scale as wheat offers ﬁnally increased. It seemed substitution of highprotein hard winter wheat for hard spring wheat of equivalent protein was having an effect on the spring wheat basis. Even with the downward adjustments, the cash basis remained historically strong. Spring wheat was 88% planted in the six key states by June 12 compared with 100% as the ﬁve-year average for the date, the U.S.D.A. said. Wheat planted was 82% in North Dakota (99% as the average), 83% in Montana (100%), 98% in Minnesota (100%) and 100% in Idaho, Washington and South Dakota. Emergence in the six states was

at 73% compared with 97% as the average. In its ﬁrst aggregate condition report of the crop this season, the U.S.D.A. rated spring wheat in the six major states 68% good to excellent (86% a year ago), 30% fair (13%) and 2% poor to very poor (1%) as of June 12. SOFT RED. Mill bids on soft red winter wheat were ﬁrm to 15c a bu higher as the harvest expanded into the Central states. In Kansas City, No. 1 soft red bids were unchanged at 55c under K.C. July to 35c over. Gulf bids on soft red for June advanced 15c, to 75c over Chicago July. St. Louis mill bids advanced 10c, to 45c over Chicago July. Chicago mill bids were 30c under Chicago September for nearby and 50c under for new crop. Mill bids in Toledo for nearby were withdrawn; new crop, 10c over Chicago July. Elevator bids were 20c under Chicago July for nearby; new crop, 5c under July. Cincinnati mill bids advanced 15c, to 10c under Chicago July for nearby or new crop. Elevator bids for nearby were 10c under Chicago July; new crop, also 10c under July. Michigan white wheat mill bids for nearby and new crop spanned range from 35c under Chicago July to July price. As of June 12, winter wheat was 70% harvested in Arkansas (57% as the 200610 average for the date), 1% in Illinois (5%), 9% in Missouri (11%) and 69% in North Carolina (29%), the U.S.D.A. said in its weekly Crop Progress report. Winter wheat conditions declined in Michigan, improved in Missouri and were unchanged in other Central states as of June 12. FBN

No. 1 hard spring
Basis Minneapolis Sept., delivered Chicago/beyond cents per bu June 17 — Change from — Year Premium June 10 June 3 ago Ordinary . . . ... ... … 11% ... ... ... … 12% 60 @ 110 +40 @ +70 +50@ +70 -55 @ -10 13% 125 @ 135 -50 @ -105 -80@ -80 15 @ 30 13.5% 270 -5 @ -40 -85@ -110 90 @ 100 14% 350 @ 385 -25 @ -95 -105@ -90 175 @ 195 14.5% 400 @ 450 -155 @ -175 -120@ -70 230 15% 550 -100 -55@ -85 360 16% ... ... ... …

Cash wheat
June 17 — Change from — Year For shipment Bid June 10 June 3 ago No. 1 Soft White, Track, Portland $ per bu May ... ... ... … July ... ... ... 4.60 August 7.47 -.44 -.58 4.50 No. 1 Hard 11.5%, Track, Portland Basis Kansas City future, cents per bu May 0.60 — +.05 … July 0.55 — +.05 0.15 August 0.25 — — … No. 1 Spring 14%, Track, Portland Basis Minneapolis future, cents per bu May 3.15 +.25 +.25 1.30 July 3.15 +.25 ... 1.10 August 1.30 -.05 +.15 …

No. 1 hard winter
Basis Kansas City July, cents per bu June 17 Premium Ordinary 0 @ 15 11% 9 @ 24 11.2% 10 @ 25 11.4% 28 @ 43 11.6% 61 @ 76 11.8% 61 @ 76 12% 61 @ 76 12.2% 61 @ 76 12.4% 61 @ 76 12.6% 80 @ 95 12.8% 90 @ 105 13% 110 @ 125 13.2% 110 @ 125 13.4% 110 @ 125 13.6% 135 @ 150 13.8% 160 @ 175 14% 285 @ 300 — Change from — June 10 June 3 — — +6@ +6 +9 @ +9 +5@ +5 +5 @ +5 +5@ +5 +5 @ +5 +16@ +16 +16 @ +16 +16@ +16 +16 @ +16 +11@ +11 +11 @ +11 +11@ +11 +11 @ +11 +4@ +4 -7 @ -7 +23@ +23 +12 @ +12 +33@ +33 +22 @ +22 — — — — — — — — — — — —
®

Year ago -60 @ -45 -50 @ -35 -45 @ -30 -21 @ -6 -21 @ -6 -21 @ -6 -11 @ 4 -3 @ 12 13 @ 28 20 @ 35 35 @ 50 50 @ 65 52 @ 67 53 @ 68 60 @ 75 70 @ 85 80 @ 95

Exporter bids and offers
For June 17 shipment Bid Offer No. 1 Hard 12%, Track Gulf Basis Kansas City future, cents per bu June +80 July … July +80 July … August +60 Sep. … September +65 Sep. … No. 2 Soft Red, c.i.f. New Orleans Basis Chicago future, cents per bu June +75 July … July +75 July … August +40 Sep. 55 September +50 Sep. … Year ago bid

Canadian domestic milling wheat
… +15 July +20 Sep. +30 Sep. Change from Year In-store, Thunder Bay, June 17 June 10 ago Canadian $ per tonne Western red spring 13.5% 456.00 -40.65 259.47 Soft white spring 282.58 -22.50 212.54 Amber durum 647.96 +37.81 221.95 U.S. $ per bu Western red spring 13.5% Soft white spring Amber durum 12.67 7.85 18.00 -1.17 -0.65 1.00 6.90 5.65 5.90

+45 +45 +45 +50

July July Sep. Sep.

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June 21, 2011

Food Business News - June 21, 2011

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