Food Business News - April 24, 2012 - 56

Ingredient Markets
Market commentary for one-week period ended April 20, 2012

Sweeteners
The much-awaited sugar tariff rate quota (T.R.Q.) increase came last Wednesday at an amount well below what sugar users wanted but about in line with what the trade expected, based on the U.S. Department of Agriculture’s cautious approach to adjusting sugar import quotas. New York world and domestic raw sugar futures declined after the announcement, but cash sugar prices were unchanged. Nearby and balance-2012 pricing for bulk reﬁned beet and cane sugar held at around 51c a lb f.o.b. across all regions. Pricing for 2013 was said to be mostly in the range of 44@48c a lb f.o.b. Midwest. Trading for both years was light, although inquiries continued from buyers ﬁnding supplies of Mexican sugar tight to lacking. If anything, the U.S.D.A. announcement may have slowed domestic trading as buyers interpreted the increase to mean lower prices but sellers held offers steady, noting the increase had little impact on nearby supply, which remained somewhat tight for the balance of 2012. The U.S.D.A. raised the 2011-12 (ﬁscal year 2012) domestic Overall Allotment Quantity (O.A.Q.) by 51,000 tons, raw value, and reassigned 420,000 tons of surplus domestic cane sugar allotment to tariff rate quota (T.R.Q.) imports as of April 19. The department said the net effect would be about a 450,000-ton boost in supply, but also acknowledged the adjustment “is not currently expected to increase FY 2012

domestic sugar supplies sufﬁciently to attain a level U.S.D.A. considers adequate.” The increase was seen raising the 2011-12 ending stocks-to-use ratio to 10.7% from 6.8% forecast in April, but was well below the U.S.D.A.’s target of 13.5% to 15.5%. The U.S.D.A. said it would re-evaluate the situation in June due to “signiﬁcant uncertainties about FY 2012 Mexican imports, domestic reﬁned and raw sugar demand, the early sugar beet crop and other market factors.” One trader suggested the U.S.D.A. may increase the reﬁned sugar T.R.Q. in June or later since it would be difﬁcult to reﬁne additional raw imports so late in the year, and because the adjustments made last week included no reﬁned sugar, which was sought by sugar users. The slow pace of Mexican exports continued as high prices there discouraged shipments. Mexican sugar output for the season through mid-April was down 10% from the same period last year, according to the nation’s sugarcane committee. Meanwhile, U.S. sugar beet planting in the four major states was 41% completed as of April 15, far ahead of 4% at the same time last year and 14% as the 2007-11 average for the date, the U.S.D.A. said. FBN

Edible Oils
Bookings of edible oils were limited last week. Prices declined. Soybean oil prices dropped. Soybean oil futures prices weakened with the rest of

the soy complex much of the week. Most agricultural commodity futures lost ground last week, but declines in the soy complex were the most pronounced until a rally on Friday. The cash basis on soybean oil was unchanged. On dips in soybean oil futures pricing, buyers stepped in to extend contract balances. On the basis of such activity in recent weeks, buyers kept ownership of their soybean oil needs extended about 60 days. Basis coverage was more extensive. Most soybean oil users earlier covered basis at least through June, and one merchandiser indicated basis coverage for July-September was 65% to 70%. The U.S.D.A. indicated net export sales of U.S. soybean oil in the week ended April 12 totaled 23,900 tonnes. Palm oil prices declined in response to the weakening in soybean oil as well as three-week lows in palm oil futures prices. Production remained seasonally sluggish, and international demand for palm oil was steady. At the same time, in spite of lower production and steady demand, palm oil stocks continued to rise. When production begins to increase seasonally, palm oil prices may encounter increased pressure. The premium to soybean oil futures prices asked for refined canola oil in the Midwest widened to 5.5c a lb. The trade anticipated Canadian producers may seed a record area to canola this year. Statistics Canada was scheduled to issue its spring planting forecasts on April 24. 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 Apr. 20 Apr. 13 Apr. 6 ago syrup3 Dextrose 42% HFCS wet 55% HFCS wet Apr. 20 Year ago Midwest beet 51.00 @ 51.50 — — 57.00 23.375 27.875 net 173/8@ 213/8 153/8@ 193/8 33.85@37.85 26.625 East Paciﬁc beet 51.00 @ 51.50 — — 57.00 Midwest 24.925 29.425 net 32.85@36.85 28.175 Midwest Cane* 51.00 @ 51.50 — — 57.00 Northeast 18¾@ 22¾ 16¾@ 20¾ 25.125 29.625 net *Spot raw plus 7% plus 17.2c 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 April-June July-September October-December January-March April-June — Change from — Apr. 20 Apr. 13 Apr. 6 30.65 -1.40 -3.95 30.65 -1.40 -3.95 30.35 -1.85 -4.10 31.40 -.65 -2.40 31.75 -1.50 -2.00 31.75 -1.60 -2.00 Year ago 37.85 37.85 37.85 36.25 35.95 35.75

Chicago soybean oil futures
Bulk in tank cars, cents per lb Apr. 20 — Change from — Delivery close Apr. 13 Apr. 6 May 55.83 -.69 -.81 July 56.28 -.59 -.75 August 56.46 -.58 -.76 September 56.61 -.60 -.75 October 56.69 -.61 -.74 December 56.96 -.58 -.70 Year ago 58.27 58.91 59.17 59.43 59.51 59.74

Edible oils
Bulk, cents per lb — Change from — Year Apr. 20 Apr. 13 Apr. 6 ago Soybean oil, Decatur 55.00 Loose lard, Chicago 50.25 Edible tallow, Chicago 48.00 Cottonseed oil, Miss. PBSY 56.50 Palm oil, ports 55.75 Palm kernel oil, ports 56.50 Coconut oil 64.50 Peanut oil, Southeast 103.50 Corn oil, Decatur 61.25 Sunﬂowerseed oil, Midwest 79.00 Canola oil, Midwest 61.25 -.75 -4.50 -1.50 -.75 -1.75 -2.00 — — -.25 — -.25 -1.00 -4.50 -1.25 -1.00 -.25 57.25 53.50 54.00 57.50 57.25

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

Crude soybean oil
Bulk in tank cars, cents per lb Delivery Decatur, Ill. April 54.83 @55.08 May 54.83 @55.08 June 55.06 @55.31 July 55.53 @55.78 August 55.71 @55.96 September 55.86 @56.11 October 55.94 @56.19 Western points 54.08 @54.33 54.08 @54.33 54.31 @54.56 54.78 @55.03 54.96 @55.21 55.11 @55.36 55.19 @55.44

— n.a. +2.00 92.50 +3.00 77.50 -.25 74.00 — 103.00 -.50 61.75

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April 24, 2012

Food Business News - April 24, 2012

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