Milling & Baking News - September 28, 2004 - 31

I N G R E D I E N T

W E E K

Bakery Flour
Bookings of bakery flour were light last
week. Price moves were choppy but not
extreme. Erratic pricing reflected a wheat
futures market struggling with direction
and an unsettled cash wheat market.
Most of the week's business in flour
markets involved fill-ins for spot needs
and October. Spot business flared up at
times as some bakers found they had underestimated near-term needs. Bread
bakers put on additional ownership for
October. New bookings for NovemberDecember were relatively minor.
Cookie-cracker and specialty bakers
weren't very active in the market for soft
flour last week. But their coverage was
more extensive than that of the bread
bakers. It was estimated that up to 80% of
prospective coverage in the fourth quarter already had been taken by soft flour
users, compared with about 65% to 70%
for the bread bakers.
Many bakers held fairly extensive futures coverage through December. These
have been waiting for a break in cash
wheat to finish contracting the flour.
It was expected that much of the remaining November-December business
would be done in the next few weeks.
There has been little interest in extending
contract balances beyond December.

Carlot Bakery Flour Prices

In the market for spring grades, there
were ongoing bookings by distributors
and other users of sacked flour, particularly in the East, who bought what was
required to keep contract balances extended about 45 days.
Grind across much of the country was
quite brisk. Southwest mills averaged
close to six days, Northwest units at five
to six. Central states grind was 5½ to six,
Buffalo about six. Southeast mills came in
at about six. California mills averaged
slightly better than six days, Pacific
Northwest six to seven. MBN

Wheat Futures
Prices of wheat futures declined on the
three exchanges last week. The market
weighed fundamental features that could
determine long-term price direction and
was more impressed last week with bearish factors. Supportive features included
continued harvest delays and probable
wheat quality deterioration in Canada and
indications that recent dryness in Australia could decrease yields there. The expanding harvest of a record corn crop was
a principal feature arguing for lower
wheat prices, though wheat recently has
shown considerable independence from
other markets. Export demand last week
provided mixed messages. The pace of
export sales was slowing compared with

Bakers Standard Patent, Kansas City

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

Sept. 24

Sept. 17

Year
ago

Kansas City
Bakers standard patent

10.95

10.90

10.10

Minneapolis
Spring standard patent
High gluten

10.95
13.95

10.85
13.85

9.90
11.55

Chicago
Cracker

10.05

10.15

10.35

a year ago. But Egypt bought more U.S.
wheat last week, and a sub-par Canadian
crop could translate into greater world
demand for U.S. wheat with high protein.
The Canadian grain harvest continued
to lag badly. The Saskatchewan spring
wheat crop on Sept. 19 was just 9% combined compared with 94% at the same
time last year and with 68% as the recent
five-year average for the date. The rainy
weather pattern continued last week,
which made for plodding progress.
There was speculation that 20% to even
40% of the crop could fail to meet milling
quality. But a proper assessment would
have to wait until the crop was in.
The spring wheat harvest in the U.S.
was 81% completed compared with 94%
as the recent five-year average. Combining continued to make only slow progress
in North Dakota and Minnesota. But a dry
stretch of weather was forecast.
The U.S. agricultural attache in Australia lowered his projection of Australian
wheat production this winter to 22.9 million tonnes because of recent dryness.
The current U.S.D.A. projection is 23.5
million tonnes.
Corn futures prices continued to set
contract lows on a daily basis as harvest
expanded into the Corn Belt. The U.S.D.A.
pegged harvest progress at 9% completed
on Sept. 19, compared with 12% as the recent average for the date. Yields have been
running higher than expected.
Sales of U.S. export wheat in the week
ended Sept. 16 totaled 414,000 tonnes,
which was up from the week before but
down 18% from the previous four-week
average. Egypt bought 120,000 tonnes of
U.S. soft white wheat last week. At the same
time, that country bought 420,000 tonnes
from other origins. U.S. exporters were facing more aggressive competition. MBN

Cash Wheat

Spring Standard, Minneapolis

Cracker Flour, Chicago

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

32 / Milling & Baking News, September 28, 2004

HARD WINTER. Premiums on hard red
winter and dark hard wheat in Kansas
City were 3c a bu higher to 1c lower last
week. Low-protein wheat held steady.
The rest of the basis moved 2@8c a bu
lower through Thursday, with the widest
losses occurring at the higher protein levels. But pressing mill demand on Friday
encountered a dearth of milling quality
offers, which pushed the basis strongly
higher, more than offsetting earlier weakness. Only 14% protein still ended lower
for the week and only by 1c a bu. The
more urgent mill demand reflected concerns that country movement of wheat
would slow during the row crop harvest
even as wheat was sought to meet flour
sales commitments.
Country elevators recently have been
able to buy more wheat from producers,
particularly in South Dakota. This wheat
bakingbusiness.com / world-grain.com

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

Milling & Baking News - September 28, 2004

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