Milling & Baking News - June 22, 2004 - 36

I N G R E D I E N T

W E E K

Bakery Flour
Bookings of bakery flour slowed last
week. The increase in activity that began
late the previous week carried over very
early in the week, but then died down as
futures prices gained from harvest delays
in soft and hard winter areas.
Although many bakers were covered
only through June with old crop, most
remained cautious to book new crop last
week, even as contracts were about to
expire. Most of the early week business
was for fill-in needs in the third quarter,
with only scattered buying into the
fourth quarter as bakers anticipated the
seasonal price decline from harvest pressure. Another spattering of buying surfaced late in the week, again mostly fill-in
by pan bread bakers.
Traditionally, winter wheat harvest
pressure has resulted in a break in basis
by this time. But this year, although harvest started early, rain delays in Kansas
and even more in soft red areas to the east
have been supportive to futures and basis
levels. Some millers said September futures in Kansas City and Chicago would
need to drop 10c to 15c a bu to prompt
buying. Pessimism over the export outlook led several to predict such a break.
But some skepticism has been expressed
over prospects for such a large price

Carlot Bakery Flour Prices

Wheat Futures
Wheat futures ended the previous
week's skid and traded in a narrow range
last week as rainfall delayed winter
wheat harvest in many areas and export
sales returned to an encouraging level.

Bakers Standard Patent, Kansas City

Bulk, f.o.b. car, $ per cwt

June 18

June 10

11.25

11.20

Kansas City
Bakers standard patent

break because of the smaller crop, harvest delays, plenty of storage capacity
and possible soft wheat quality issues. As
this scenario plays out, some analysts
have suggested wheat flour users, most
of whom have some coverage through
July, should add to coverage through
September whenever prices dip, rather
than wait for a large price break.
Wet, humid conditions that are delaying harvest have already created quality
and disease concerns. In the Southeast,
higher levels of vomitoxin and scab have
been evident in some soft red wheat, as
have light test weights. In hard red areas,
early harvest test weights were down
slightly from last year but protein levels
and baking quality appeared good.
Grind continued strong in most areas.
Southwest mills averaged about six days,
and Upper Midwest about five. Units in
the Central states operated five to 5½ days,
while Buffalo and adjacent eastern areas
including the Southeast averaged five.
California mills ran just over six days and
Pacific Northwest 6½ to seven. MBN

Year
ago
9.90

Early in the week Kansas City futures
set three-month lows while Chicago hit
six-month lows. But the trend reversed as
the week progressed, as rain continued to
hamper winter wheat harvest and exports showed signs of new life.
The U.S. Department of Agriculture
pegged winter wheat harvest progress as
of June 13 at 23% completed, compared
with 14% as the recent five-year average
for the date. Oklahoma was well ahead at
80% as of that date, although trade sources
expected harvest would be more than 90%
done by the weekend. Yields in Oklahoma
remained good, as did quality. Harvest in
Texas also ran ahead of average and last
year. In Kansas, where 15% of the crop
was harvested by June 13, progress was
interrupted last week by frequent heavy
rain. Test weights were good in most areas, but yields varied widely. Some fields
in west central Kansas were abandoned
because of earlier freeze and drouth damage. Despite frequent rain in Kansas, fields
appeared to dry fast and harvest completion exceeded 50% in several counties as
the week ended.
Export demand for U.S. wheat, which
had been flat recently, supported futures
prices last week. The purchase of 32,000
tonnes by Libya the week ended June 10
was that country's first of U.S. wheat
since 2002-03. Egypt encouraged the
trade with the purchase of 60,000 tonnes
soft red wheat last week after buying
French wheat the previous week. The
U.S.D.A. reported export sales of 590,500
tonnes in the week ended June 10, up
from the previous week and above most
expectations. MBN

Cash Wheat

Minneapolis
Spring standard patent
High gluten

11.10
13.35

11.00
13.25

10.25
11.25

Chicago
Cracker

10.30

10.25

10.55

Spring Standard, Minneapolis

Cracker Flour, Chicago

Bulk, f.o.b. car, $ per cwt

36 / Milling & Baking News, June 22, 2004

HARD WINTER. Premiums on hard red
winter and dark hard wheat in Kansas
City were firm for lower proteins and
weak for higher proteins. Ordinary was
up 2c a bu and 11% to 11.4% protein up 1c.
Wheat with protein of 11.6% and 11.8%
was unchanged, 12% to 12.8% lost 3c and
13% and above lost a nickel. Supply was
generally light but met with only modest
mill demand. Limited trades above
posted ranges occurred throughout the
week but were not viewed as representative of the broader market. Strength in
lower proteins came late in the week
when mills used it to blend with higher
proteins on contract.
Weather continued to dominate the
market, with frequent, sometimes heavy,
rains delaying harvest activities almost
daily, especially in Kansas. Because of the
delays, normal harvest pressure on basis
levels did not develop, or at least was
delayed. Some analysts expressed doubt
that a large price break would occur this
year, in part because of the delayed harbakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - June 22, 2004

Table of Contents for the Digital Edition of Milling & Baking News - June 22, 2004