Milling & Baking News - February 8, 2011 - 44

Ingredient Week 

Sweeteners
Cash sweetener markets were mostly quiet last week. Sugar trading was slow. Some offers were adjusted upward while small amounts continued to trade at the low end of the nearby price range. Corn sweetener shipments remained brisk, especially to Mexico. Offers from a major reﬁner were raised to 57c a lb f.o.b. effected Feb. 2 for spot through Dec. 31, 2011. Other offers for 2011 appeared to hold near 55c a lb, but a few sales of small volume again were reported around 53c a lb f.o.b. There still was some April-June and July-September business to complete, but beet processors were mostly sold out of prospective 201011 production, leaving cane reﬁners and Mexican supply as main sources. Most offers remained at 51c a lb f.o.b. for Oct. 1 through Dec. 31, 2011, from Jan. 1 through Sept. 30, 2012, and for calendar 2012. Inquiry for 2012 and 2013 was ongoing, but few sales were evident. Some estimates put 2012 sales at 50% of prospective production. The 57c-a-lb offer was mostly attributed to gains in raw sugar futures prices. Nearby New York world sugar futures rallied to a new 30-year high above 36c a lb as a powerful cyclone moved through the major sugar cane region of Australia, typically the world’s third-largest raw sugar exporter. Futures prices declined sharply once the cyclone passed and damage, though signiﬁcant, was less

than expected. Proﬁt-taking also contributed to futures’ lower close for the week. Domestic raw sugar futures in New York traded higher but with fewer ﬁreworks than world contracts. Nearby March and May futures traded above 40c a lb with July and September contracts above 41c at midweek. While coming off their highs, prices ended the week higher. Concern about tight global raw sugar supplies did little to deter shipments from Mexico to the United States as the premium in U.S. markets remained wide enough to encourage sales. Some traders expressed surprise at the strong exports by Mexico, suggesting it may have to turn to the tight world market later in the year to meet domestic demand. Production of cane sugar in Mexico totaled 1.82 million tonnes during the ﬁrst 14 weeks of the 2010-11 season through Jan. 29, up 25% from the same period last year, Mexico’s National Sugar Industry Chamber said. Mexico continued to receive shipments of U.S. high-fructose corn syrup to replace sugar exports, but traders suggested there was a limit to the amount of HFCS the Mexican markets would accept. MBN

Bakery Shortening
Bookings of edible fats and oils were light last week. Prices of most ingredients advanced. Soybean oil prices at 55¾c a lb, basis eastern Illinois, advanced to the highest

levels since July 2008. In February 2009, the soybean oil price was 33c a lb. Soybean oil futures prices were approaching 60c a lb. The cash basis on soybean oil was incredibly resilient given huge stocks overhanging the market. The U.S. Census Bureau estimated stocks of soybean oil at the end of December 2010 at 3,474 million lbs, up from 3,296 million lbs in November and compared with 3,110 million lbs in December 2009. Export demand provided an outlet for U.S. soybean oil in recent weeks, providing some support to the basis. While surging soybean oil futures prices made buyers cringe, most were not severely affected by the strong cash basis as they covered the basis component of prospective soybean oil contracts at lower levels several weeks ago. It was estimated basis coverage was 80% in the second quarter of 2011 and 35% to 40% for the third quarter. Buyers holding basis coverage extended contract balances of physical oil whenever futures prices dipped or they could wait no longer. Palm oil prices also continued to advance with Malaysian palm oil futures prices setting new 35-month highs. Sunﬂowerseed oil prices surged with tight world supplies an increasingly important factor. Meat fat prices advanced in sympathy with vegetable oil markets and on smaller slaughter numbers. Canola oil and cottonseed oil prices tracked the soybean oil market. MBN

Beet and cane sugar
f.o.b. plant, cents per lb

Sweeteners
Delivered basis, cents per lb 42% HFCS spot price1

HFCS list price2 Regular — Change from — Year corn Feb. 4 Jan. 28 Jan. 21 ago syrup3 Dextrose 42% HFCS wet 55% HFCS wet Feb. 4 Year ago Midwest beet 53.00 @ 55.00 — -2.00 53.00 24.625 East 21.375 24.875 net 29.85@33.85 153/8@ 193/8 153/8@ 183/8 Paciﬁc beet 53.00 @ 55.00 — -2.00 53.00 Midwest 26.175 Midwest 22.925 26.425 net 28.85@32.85 Cane* 53.00 @ 57.00 — -2.00 53.00 Northeast 16¾@ 20¾ 16¾@ 19¾ 26.375 West 23.125 26.625 net 31.85@35.85 *Spot raw plus 7% plus 9.4c with 2% cash discount. Southeast 167/8@ 207/8 167/8@ 197/8 25.875 22.625 26.125 net Southwest 16½@ 20½ 16½@ 19½ Raw cane 26.575 23.325 26.825 net West 173/8@ 213/8 173/8@ 203/8 Delivered reﬁner, cents per lb 1-Variations in prices often tied to tank car versus truck deliveries. 2-Prices are the lowest available to the publication. 3-Regular 42 DE/43 Baume, f.o.b. tank cars, trucks Contract Nearby February-March April-June July-September October-December January-March — Change from — Feb. 4 Jan. 28 Jan. 21 39.80 +2.20 +1.45 39.80 +2.20 +1.45 40.00 +1.60 +1.20 41.00 +1.55 +1.20 38.60 +3.35 +3.20 35.05 +.80 +.90 Year ago 40.35 40.35 39.30 35.75 32.25 29.80

Chicago soybean oil futures
Bulk in tank cars, cents per lb Feb. 4 — Change from — Delivery close Jan. 28 Jan. 21 March 58.98 +1.71 +1.42 May 59.51 +1.74 +1.51 July 59.96 +1.79 +1.55 August 60.11 +1.84 +1.60 September 60.23 +1.89 +1.64 October 60.21 +1.92 +1.61 Year ago 37.00 37.48 37.93 38.09 38.23 38.31

Edible oils
Bulk, cents per lb — Change from — Year Feb. 4 Jan. 28 Jan. 21 ago Soybean oil, Decatur Loose lard, Chicago Edible tallow, Chicago Cottonseed oil, Miss. PBSY Palm oil, ports Palm kernel oil, ports Coconut oil Peanut oil, Southeast Corn oil, Decatur Sunﬂowerseed oil, Midwest Canola oil, Midwest 56.00 52.75 51.75 58.00 61.75 67.00 90.00 78.00 60.50 84.00 61.25 +1.50 +1.00 -.75 +1.75 +1.50 +2.25 +3.00 -4.25 — +7.00 +1.50 +1.50 33.00 +2.50 29.50 +1.25 29.00 +1.50 38.00 +.75 38.75 +3.75 44.75 +3.00 44.00 +1.50 60.00 +.75 38.50 +7.00 52.00 +1.75 40.25

Spot soybean oil
Decatur, Ill., bulk, cents per lb

Crude soybean oil
Bulk in tank cars, cents per lb Delivery Decatur, Ill. February 55.73 @55.98 March 55.73 @55.98 April 56.25 @56.50 May 56.51 @56.76 June 56.74 @56.99 July 56.96 @57.21 August 57.11 @57.36
44 / February 8, 2011 Milling & Baking News

Western points 54.98 @55.48 54.98 @55.48 55.50 @56.00 55.76 @56.26 55.99 @56.49 56.21 @56.71 56.36 @56.86

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Milling & Baking News - February 8, 2011

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