Milling & Baking News - August 24, 2010 - (Page 1)

THE NEWS WEEKLY OF GRAIN-BASED FOODS AUGUST 24, 2010 / NEWS Grain Market Roundtable Supply shocks and trade upheaval roil wheat markets Story on Page 12 LATE NEWS Smucker oils and baking profit falls ORRVILLE, OHIO - Operating profit within the U.S. retail oils and baking market segment at J.M. Smucker Co. fell 12% in the first quarter ended July 31 to $22,587,000, down from $25,680,000 in the same period a year ago. Sales also finished lower, easing 11% to $173,871,000 from $194,416,000. Smucker said net sales and volume declines were driven primarily by Pillsbury flour and baking mixes and Crisco oils "in a continuing competitive and promotional environment." Meanwhile, the U.S. retail consumer unit posted operating profit of $71,417,000, up 8% from $66,123,000 in the same period a Continued on Page 8 Russian wheat exports 18,500 3,000 12,552 18,393 in 1,000 tonnes 10,584 Snyder's strength in salty snacks seen as complement to Lance KANSAS CITY - World wheat supply concerns culminating with Russia's drought and that nation's ban on grain exports effective Aug. 15 fed a rally in wheat futures that began in mid-June and saw prices surge above $8 a bu in early August at all three U.S. exchanges for the first time in nearly two years. Prices soared above $3.50 a bu from mid-June levels before falling during the past couple of weeks amid ideas the rally was overdone. Uncertainties abound, according to analysts interviewed by Milling & Baking News. Bears point to still abundant supplies of U.S. and world wheat and indications strong prices will encourage increased winter wheat plantings this fall across the Northern Hemisphere, said Steve '06-07 '07-08 '08-09 '09-10 '10-11* Source: U.S. Department of Agriculture *projection Freed, vice-president, ADM Investor Services, Chicago. In contrast, bulls suggest foreign demand for Continued on Page 21 Flour production in April-June down 2.2% from year ago; half-year down 0.3% WASHINGTON - Flour output by U.S. mills in April-June fell 2.2% behind the same period of last year, while the rate of grind in the quarter dropped to the lowest levels in four years. Regional statistics underscored a significant flour production pickup in the spring wheat area in contrast with output reductions in most other areas. U.S. mills in the second quarter of 2010 produced 100,630,000 cwts of wheat flour, down 2,296,000 cwts, or 2.2%, from 102,926,000 in April-June 2009, according to data issued by the Bureau of the Census of the U.S. Department of Commerce. Output was the smallest for a quarter since January-March 2007 when it was 100,255,000. It was also the smallest total for the second quarter since 2006 when it was 97,969,000. The decrease in second-quarter output this year followed a gain of 1,657,000 cwts in first 2010 quarter over a year earlier. That gain followed six successive quarters when output had been less than a year earlier. Before that 12 successive quarters showed output gains from a year earlier. This was the longest period of gains in recent memory. Record flour production for a quarter Continued on Page 28

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Milling & Baking News - August 24, 2010