Food Business News - November 6, 2012 - 52

Ingredient Markets
Market commentary for one-week period ended November 2, 2012

Sweeteners
Sweetener markets were relatively quiet last week in spite of disruptions caused by Hurricane Sandy. Corn sweetener pricing for 2013 was “on the table.” Bulk reﬁned beet sugar prices were mostly unchanged with a hint of ﬁrmness. The market was around 35c a lb f.o.b. for Midwest beet sugar with activity below that level no longer evident. West coast beet and Northeast cane sugar prices were unchanged and closer to 36½@37c a lb f.o.b. Both beet and cane sugar were mostly offered in the 38@38½c a lb f.o.b. range in all regions. Trading remained light with at least 80% of the prospective 201213 business previously booked, with much of it at prices above current levels. Some brokers suggested users cover some 2014 needs at these price levels, but there was no evidence of activity for that period. Most buyers and sellers still saw limited upside potential for sugar prices due to ample domestic supplies, growing Mexican supplies and uncertainty about demand. As the sugar cane harvest began in Mexico, with production usually active in November, forecasts of 2012-13 sugar output were increased by several market participants. With supplies already ample in Mexico and the new crop harvest under way, Mexican sugar has been offered aggressively in the United States as reﬁners attempted to reduce supply and boost prices there. Traders noted sales of Mexican estandar

sugar to U.S. reﬁners were a key factor pressuring domestic raw sugar futures to multi-year lows recently. The U.S. Department of Agriculture said the sugar beet harvest in the four major states was 80% completed as of Oct. 28 compared with 73% a week earlier, 84% at the same time last year and 82% as the ﬁve-year average for the date. Sugar cane harvesting in Louisiana advanced to 34% completed as of Oct. 28, ahead of 26% as the average. One Red River Valley cooperative estimated losses of about 8% in sugar production due to adverse weather affecting the sugar beet harvest in northern areas. Otherwise, production was strong across most beet and cane states. Corn sweetener contract negotiations for 2013 appeared to be on hold. Most offers from corn reﬁners appeared to be up about 4.25c a lb from 2012 contracted levels with pricing “good” until Nov. 16, 2012. As a result, buyers stayed mostly on the sidelines hoping for a bump in corn production estimates in the Nov. 9 U.S.D.A. Crop Production report. Some traders indicated buyers may be open to a 3c rise from 2012 considering corn prices were up 25% from a year ago and sugar prices were down about 40%. FBN

Edible Oils
Bookings of edible oils were limited last week. Prices of most ingredients dropped. Soybean oil prices dropped. Soybean

oil futures prices tumbled. Soybean crush margins were good with heavy demand for soybean meal. The strong crush pressured both soybean oil futures and the cash basis on soybean oil, which sustained the widest drop in several weeks as refiners turned more aggressive in seeking outlets for the first and second quarters of 2013. But most soybean oil users earlier booked their requirements through the end of December, and with the basis finally showing signs of weakness, they were inclined to hold back to see if further declines were in store. Lard prices advanced with the stronger tone attributed to baking season demand. In contrast, edible tallow prices dropped with the weakness in that market tied to a drying up in demand from the biodiesel sector. Palm oil prices eased and remained at a wide discount to soybean oil. While Malaysian palm oil exports in October increased 9% from September, seasonally strong production resulted in mounting stocks. Stocks in both Malaysia and Indonesia were expected to continue to rise and pressure prices. The premium to soybean oil futures prices asked for refined canola oil in the Midwest widened to 8c a lb. The premium reflected a smaller-than-expected Canadian canola crop. At the same time, merchandisers said they viewed the historically wide spread between canola oil and soybean oil prices as unsustainable. “Something has to give,” one market participant observed. 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 Nov. 2 Oct. 26 Oct. 19 ago syrup3 Dextrose 42% HFCS wet 55% HFCS wet Nov. 2 Year ago Midwest beet 35.00 @ 38.50 — -1.00 59.00 23.375 27.875 net 173/8@ 213/8 153/8@ 193/8 33.85@37.85 26.625 East Paciﬁc beet 36.00 @ 38.00 — -1.00 59.00 Midwest 24.925 29.425 net 32.85@36.85 28.175 Midwest Cane* 36.50 @ 38.50 — -1.00 59.00 Northeast 18¾@ 22¾ 16¾@ 20¾ 25.125 29.625 net *Spot raw plus 7% plus 11.8c 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 29.825 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 — Change from — Contract Nov. 2 Oct. 26 Oct. 19 Nearby 22.40 +.90 -1.10 November-December 22.40 +.90 -1.10 January-March 22.50 +.70 -1.00 April-June 22.60 +.10 -1.00 July-September 22.60 +.10 -1.15 October-December 23.25 — -.75 Year ago 38.50 38.50 39.00 39.00 39.00 37.50

Chicago soybean oil futures
Bulk in tank cars, cents per lb Nov. 2 — Change from — Delivery close Oct. 26 Oct. 19 December 49.26 -1.70 -2.32 January 49.65 -1.66 -2.33 March 50.11 -1.62 -2.32 May 50.57 -1.52 -2.17 July 50.97 -1.39 -1.98 August 51.04 -1.37 -1.97 Year ago 51.87 52.10 52.46 52.81 53.08 53.18

Edible oils
Bulk, cents per lb — Change from — Year Nov. 2 Oct. 26 Oct. 19 ago Soybean oil, Decatur 47.25 Loose lard, Chicago 52.50 Edible tallow, Chicago 41.00 Cottonseed oil, Miss. PBSY 50.00 Palm oil, ports 42.00 Palm kernel oil, ports 45.25 Coconut oil 43.00 Peanut oil, Southeast 100.00 Corn oil, Decatur 58.00 Sunﬂowerseed oil, Midwest 73.50 Canola oil, Midwest 57.25 -2.50 +3.50 -2.25 -1.50 +.25 -.75 — — -.50 — -1.00 -3.00 52.75 +4.50 55.25 -2.25 -2.00 +.50 -.50 -1.00 46.75 51.75 50.00 57.25 57.00

Spot soybean oil
Decatur, Ill., bulk cents per lb
60.00 54.00 48.00 42.00 N F M Previous Year A Current Year

Crude soybean oil
Bulk in tank cars, cents per lb Delivery Decatur, Ill. November 46.26 @47.26 December 46.26 @47.26 January 46.65 @47.65 February 46.88 @47.88 March 47.11 @48.11 April 47.35 @48.35 May 47.57 @48.57 Western points 45.76 @46.26 45.76 @46.26 46.15 @46.65 46.38 @46.88 46.61 @47.11 46.85 @47.35 47.07 @47.57

-4.00 100.00 -1.00 55.25 +1.00 91.00 -.75 57.50

FOODBUSINESS NEWS

November 6, 2012

Food Business News - November 6, 2012

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