Food Business News - January 31, 2012 - 46

Ingredient Markets
Market commentary for one-week period ended January 27, 2012

Sweeteners
Sugar pricing was uneven last week, although trading remained mostly slow. Prices eased in the Midwest but ﬁrmed slightly in the West. Corn sweetener markets were routine and quiet. Prices of bulk reﬁned beet sugar eased to around 51c a lb f.o.b. in the Midwest with some sales closer to 50c. But prices on the West coast held or even ﬁrmed slightly to 53@55c a lb while prices on the East coast were unchanged at 53@56c through the end of 2012. One broker said he had several calls from beet processors seeking orders. Trading was slow, which was typical for the time of year. Traders attributed the price weakness in the Midwest to strong production by beet processors who were pushing to move an oversupply. Some suggested the mild winter and concern about spoilage in beet piles resulted in strong production, plus the beets likely sliced easier since they weren’t frozen as hard as usual. Beet processors have not reported any spoilage. The American Crystal Sugar Co. lockout of union members continued with replacement labor operating processing plants across the Upper Midwest. The weakness in the Midwest market puzzled some who expected sugar supplies to be tight in view of the U.S. Department of Agriculture’s extremely low projected 201112 ending-stocks-to-use ratio of 5.3% and its forecast of lower imports from Mexico.

The perceived tightness was supportive to prices in western markets. There was more conﬁrmation Mexico’s 2011-12 cane sugar production may fall below earlier estimates. The country’s cane growers union forecast production at 5.1 million tonnes, down from its initial forecast of 5.3 million tonnes due to severe drought. The union forecast sugar exports to the United States to hold at 1 million tonnes due to strong U.S. prices relative to those in Mexico and active Mexican imports of U.S. high-fructose corn syrup. The U.S.D.A. earlier in January trimmed its forecast of Mexican sugar production to 5 million tonnes (actual weight) from 5.33 million tonnes, and cut projected Mexican exports to 892,000 tonnes from the 1,361,000 tonnes forecast in December. Some trade estimates have put 2011-12 Mexican sugar production below 5 million tonnes. Reports indicated about 800,000 tonnes of sugar already may have been contracted for export in 2011-12. Nearby March domestic raw sugar futures ﬁrmed last week, but later months saw modest losses. World raws in New York rose to two-month highs early but eased after midweek. FBN

Edible Oils
Bookings of edible oils were limited last week. Price changes were mixed. Shipments proceeded in a timely manner. Soybean oil prices advanced. Soybean oil

futures prices posted wide gains along with the rest of the soy complex that advanced on concerns about South American crop potential. The cash basis on soybean oil was unchanged. Buyers of soybean oil were active a couple of weeks earlier when soybean oil futures prices dipped toward 50c a lb. Around that level, buyers extended contract balances to about 60 days. This provided some breathing space to await further market developments. South American soybean areas received rain, but earlier dryness was thought to have taken a toll on yield potential. Some analysts lowered their forecasts for the Brazil crop, and many expected production to fall 4.5 million tonnes or even 5 million tonnes short of reaching the current U.S. Department of Agriculture forecast at 74 million tonnes. Argentine production also was expected to drop from the current U.S.D.A. forecast of 50.5 million tonnes. While palm oil prices were unchanged, that market’s undertone was said to be weaker as export demand, which typically declines during the ﬁrst quarter of a calendar year, was softer than expected. India in particular was not buying as heavily as anticipated. Domestic corn oil prices strengthened on a recent expansion in demand. Canola oil pricing followed the soybean oil market with the premiums asked for reﬁned canola oil compared to soybean oil futures at about 4c a lb in the Midwest. Meat fat prices weakened. FBN

Beet and cane sugar
f.o.b. plant, cents per lb

Sweeteners
Delivered basis, cents per lb HFCS spot price1

HFCS list price2 Regular — Change from — Year corn Jan. 27 Jan. 20 Jan. 13 ago syrup3 Dextrose 42% HFCS wet 55% HFCS wet Jan. 27 Year go Midwest beet 51.00 @ 53.00 -1.00 -1.00 53.00 23.375 27.875 net 173/8@ 213/8 153/8@ 193/8 33.85@37.85 26.625 East Paciﬁc beet 53.00 @ 55.00 +1.00 +1.00 53.00 Midwest 24.925 29.425 net 32.85@36.85 28.175 Midwest Cane* 53.00 @ 56.00 — — 53.00 Northeast 18¾@ 22¾ 16¾@ 20¾ 25.125 29.625 net *Spot raw plus 7% plus 13.2c with 2% cash discount. Southeast 187/8@ 227/8 167/8@ 207/8 35.85@39.85 28.375 West 24.625 29.125 net Southwest 18½@ 22½ 16½@ 20½ 27.875 Raw cane 25.325 26.825 net West 193/8@ 233/8 173/8@ 213/8 28.575 Delivered reﬁner, cents per lb 1-Variations in prices often tied to tank car versus truck deliveries. 2-Prices are the lowest available to the publication. 3-Regular 42 DE/43 Baume, f.o.b. tank cars, trucks Contract Nearby February-March April-June July-September October-December January-March — Change from — Jan. 27 Jan. 20 Jan. 13 34.25 +.05 -.45 34.25 +.05 -.45 34.30 -1.35 -1.10 34.75 -.85 -1.00 35.40 +.40 -.10 33.95 +.55 +.15 Year ago 37.60 37.60 38.40 39.45 35.25 34.25

Chicago soybean oil futures
Bulk in tank cars, cents per lb Jan. 27 — Change from — Delivery close Jan. 20 Jan. 13 March 51.59 +1.16 +1.30 May 52.02 +1.16 +1.32 July 52.41 +1.16 +1.35 August 52.53 +1.18 +1.37 September 52.63 +1.21 +1.38 October 52.68 +1.24 +1.40 Year ago 57.27 57.77 58.17 58.27 58.34 58.29

Edible oils
Bulk, cents per lb — Change from — Year Jan. 27 Jan. 20 Jan. 13 ago Soybean oil, Decatur Loose lard, Chicago Edible tallow, Chicago Cottonseed oil, Miss. PBSY Palm oil, ports Palm kernel oil, ports Coconut oil Peanut oil, Southeast Corn oil, Decatur Sunﬂowerseed oil, Midwest Canola oil, Midwest 51.00 48.75 51.00 53.00 50.00 53.75 69.00 96.00 55.25 88.00 55.50 +1.00 -.25 -.50 +1.00 — +1.00 — — +.75 — +1.00 +1.25 54.50 -.75 -.25 51.75 52.50

Spot soybean oil
Decatur, Ill., bulk cents per lb
63.00 53.00 43.00 33.00 23.00 J A J
Previous Year

Crude soybean oil
Bulk in tank cars, cents per lb Delivery Decatur, Ill. January 50.84 @51.09 February 50.84 @51.09 March 50.84 @51.09 April 51.31 @51.56 May 51.52 @51.77 June 51.72 @51.97 July 51.91 @52.16 Western points 50.09 @50.59 50.09 @50.59 50.09 @50.59 50.56 @51.06 50.77 @51.27 50.97 @51.47 51.16 @51.66

+1.50 56.25 -.25 60.25 +1.00 — — +1.00 64.75 87.00 82.25 60.50

O
Current Year

— 77.00 +1.00 59.75

FOODBUSINESS NEWS

January 31, 2012

Food Business News - January 31, 2012

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