Milling & Baking News - June 30, 2009 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS JUNE 30, 2009 / FEATURE Senate report calls for tighter limits on index trader activity in wheat markets Nothing plain about these ingredients Premium sources of agave, chocolate and vanilla may create high-end products Story on Page 19 LATE NEWS Kraft opens expanded frozen pizza plant LITTLE CHUTE, WIS. - Kraft Foods Inc. last week opened the doors to its newly expanded pizza plant in Little Chute. The 108,000-square-foot expansion includes a new pizza crust bakery line and an assembly line, and will add 300 jobs at the plant. "This major expansion in Little Chute shows our commitment to Wisconsin and gives us the capacity we need to maintain our strong momentum," said Tim Cofer, president of Kraft Pizza Co. "We're extending our industry leadership by making more of the highest-quality pizzas and frozen meals." Kraft said almost all of its pizza is produced at its plants in Continued on Page 8 WASHINGTON - Senator Carl Levin of Michigan and Senator Tom Coburn of Oklahoma, chairman and acting ranking minority member, respectively, of the investigations subcommittee of the Senate Committee on Homeland Security and Governmental Affairs, on June 24 released a 247-page report that concluded that commodity index traders made such large purchases on the Chicago wheat futures market that they pushed up futures prices, disrupted the normal rela- Levin tionship between futures prices and cash prices for wheat, and caused farmers, grain elevators, grain processors, consumers and others to experience significant unwarranted costs and prices risks. The report, titled "Excessive Speculation in the Wheat Market," urged tight limits on index trader activity in the wheat market. "It is another case of speculative money overwhelming a market and federal regulators failing to take the steps needed to protect the market," Mr. Levin said. "In fact, the Commodity Futures Trading Commission has allowed some index traders to exceed normal trading limits for wheat. It is time for the C.F.T.C. to change course, rein in commodity index traders, and clamp down on excessive speculation that is disrupting commodity prices." A one-year subcommittee investigation examined millions of trading Coburn records from the Chicago Mercantile Exchange, the Kansas City Exchange, the Minneapolis Grain Exchange, the C.F.T.C. and others to track and analyze wheat prices. The subcommittee report said data showed commodity index traders injected billions of dollars into the wheat futures market over the last six years. Commodity index traders increased their holdings from a total of about 30,000 wheat Continued on Page 28 Industrial use of grain still rising, but at slower pace due to fuel LONDON - In the face of brakes applied by governments and the market itself, industrial use of grains, mainly for making fuel, was estimated to have increased 11% in 2008-09 over the previous year, with a further 6% rise in prospect for 2009-10. This analysis was issued by the International Grains Council in its most recent Grain Market Report published just ahead of this year's I.G.C. Grains Conference held in London. At the conference, the use of grains for making fuel, mainly for ethanol production in the United States, had the attention of several speakers. These views ranged from the declaration by a U.S. grain spokesperson that the fuel-versus-food issue no longer mattered in the context of market developments of recent months, to views from several countries that grains should not be used for making fuel in light of the expanding need for food among rising numbers of hungry people. The expanding use of grains in Continued on Page 15

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Milling & Baking News - June 30, 2009