Milling & Baking News - July 27, 2004 - 35

I N G R E D I E N T

Bakery Shortening
Bookings of bakery shortening expanded last week. Prices dropped
sharply.
Wide declines in soybean oil futures
prices ignited a flurry of booking toward
the week's end. Most major buyers already had covered their needs through
old crop. But those with gaps to fill
through September did so on the price
break. Some smaller users were even
more aggressive, with a few extending
contract balances into October-December
or even well into 2004.
The cash market for old crop soybean
oil firmed a bit on the low end of the
quoted range, in part because of the precipitous drop in the futures market. Old
crop supplies remained tight, and new
crop won't be available in significant volume for several weeks.
Oils that are priced in relation to soybean oil followed the latter market lower.
Tropical oils bore the additional weight of
stronger-than-expected production and
stocks building in principal exporting
countries.
The lard market was exceptionally
strong. A factor was large sales of back fat
to Mexico for rendering.
Export demand for U.S. edible oil was
piddling. MBN

Soy Flour
Bookings of soy flour were limited last
week. Prices continued to decline.
Buyers, including bakers, were
pleased that pricing at long last seemed
to be working in their favor. Most of the
trade already had covered their needs
through September and were content to
watch prices work lower. The soybean
crop still had the critical month of August
to endure, but conditions currently
looked favorable. A shift toward hot and
dry weather could shake up the market.
Otherwise, prices could drift lower still.
Those users with August and September coverage yet to take were especially
relieved to see the market soften. But they
were not heavy buyers last week, hoping
that nearby prices would be further
trimmed in coming weeks. MBN

further gains just before schools are back
in session. Demand for brewer's grits
was near its summer peak. Corn flour
sales were steady. MBN

Corn & Soy Futures
Favorable growing conditions last
week sent corn and soybean to multimonth lows. A technical "bounce" Friday
pulled futures off their lows.
As of July 18, the corn crop was rated
76% good to excellent, up two points
from a week earlier and four points better
than last year. The improving crop sent
September futures to new contract lows
on consecutive days. Disappointing export sales data reported late in the week
added pressure.
The soy complex began firm, succumbed to the weather by midweek and
saw the August contract end down the
50c-per-bu limit on Thursday. The condition of the soybean crop was rated 68%
good to excellent as of July 18, unchanged
from a week earlier and even with last
year. Soybean and meal futures broke at
midweek, and even better-than-expected
export sales could not stop the slide. MBN

Oats
Bookings of food grade oat flakes were
very light last week, though there were
signs that an expansion in activity might
not be far off. Prices were unchanged.
New contract low prices were set in
oats futures last week, with weakness in
the corn market a key factor in the decline. At the same time, the cash basis on

Spot Soybean Oil

bakingbusiness.com / world-grain.com

oats rose as an offset, with the result that
there were no changes in product pricing.
Most major users already had taken
coverage through September. There was
significant inquiry last week, though
little business resulted. At the same time,
suppliers indicated that they expected
the pace of forward buying to pick up
before long.
The oats harvest was 5% done on July 18
in the eight key states, compared with 9%
as the recent five-year average for the date.
Rated good to excellent at last week's outset was 62% of the nation's crop, unchanged from a week earlier and compared
with 72% a year ago. MBN

Sweeteners
With just a week to digest the 2004-05
Overall Allotment Quantity (O.A.Q.),
buyers and sellers were mostly waiting
before making any significant moves.
Beet sugar prices were unchanged. No.
14 futures declined sharply last Monday
but partially recovered as the week went
on. Spot raws were 20 points lower, and
deferreds were down 25 to 35 points.
A surge in contracting some predicted
would follow the O.A.Q. announcement
failed to materialize. The U.S. Department of Agriculture announced late July
16 an O.A.Q. of 8.1 million tons, raw
value, for the 2004-05 marketing year,
and left the 2003-04 O.A.Q. at 8.25 million
tons. But the U.S.D.A. left the door open
for further adjustments.
As the week progressed, more in the
trade began to judge the announced

Oats

Decatur, Ill., bulk cents per lb
July 23

Week's
change

Oat flakes, food grade, f.o.b.
Minneapolis, bagged, $ per cwt 19.25@19.50
Milling quality oats, No. 2 heavy,
delivered Minneapolis, $ per bu
1.503/4
Oat screening, clean out,
oats unground, $ per bu
.80@1.10
Oat hull, ground hulls only, $ per ton 10@15

-
-11 c
-
-

Spot Shortening
Bulk, cents per lb

Corn Meal
Sales of corn meal were seasonally
brisk last week. Prices dropped again.
Further declines in corn futures prices
encouraged additional users to book coverage through the end of the year.
Last week's demand for flaking grits
remained solid. Sales to breakfast cereal
manufacturers were expected to increase
just ahead of the start of the new school
year. Snack meal demand was seasonally
strong, and that market, too, should see

W E E K

Chicago Soybean Oil Futures
Bulk in tank cars, cents per lb
July 23
Week's
Delivery
close
change
August
24.72
-1.63
September
23.96
-1.69
October
23.18
-1.49
December
22.48
-1.18
January
22.45
-1.07
March
22.45
-0.92

Year
ago
20.16
20.12
19.84
19.45
19.42
19.37

July 23
Soybean oil, Decatur
26.75
Loose lard, Chicago
30.00
Edible tallow, Chicago
22.00
Cottonseed oil, Miss. PBSY 30.25
Palm oil, ports
22.50
Palm kernel oil, ports
33.00
Coconut oil, West coast
35.25
Peanut oil, Southeast
56.00
Corn oil, Decatur
29.00
Sunflowerseed oil, Midwest
31.75
Canola oil, Midwest
29.75

Week's
change
-1.50
-
+1.00
-.50
+.50
-.25
-.75
-
-.75
-2.00
-.75

Milling & Baking News, July 27, 2004 / 35

Year
ago
21.00
19.75
18.00
28.00
22.00
21.00
21.00
60.00
31.00
32.50
26.25

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Milling & Baking News - July 27, 2004

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