Food Business News - August 2, 2011 - 51

Market commentary for one-week period ended July 29, 2011

Cash Wheat
HARD WINTER. Premiums on hard red winter wheat in Kansas City were 25c a bu higher to 5c lower last week. The recent slump in cash hard winter premiums faltered after a last round of declines at the week’s outset. The basis steadied at midweek and turned higher toward the week’s end. The late-week bounce was attributed to light offers, West coast demand and end-of-month buying to ensure pipelines remained adequately ﬁlled. Market strength was tempered by ongoing deliveries of wheat that were applied against existing contracts. The basis on the highest proteins maintained wide premiums to the rest of the protein scale, reﬂecting demand for high-protein hard winter wheat to substitute for higher-priced spring wheat of equivalent protein in certain ﬂour blends. Earlier sharp declines in the cash basis seemed to slow the pace of rail car loadings. Wide carrying charges in Kansas City wheat futures also argued for a patient stance with regard to marketing more wheat. There was little business in the market for to-arrive wheat. Discussions about fourth-quarter contracts were indicated but bids and offers to date were too far apart for most buyers. Combining expanded across Nebraska and South Dakota with occasional rain interruptions. New crop South Dakota wheat with protein of 12% protein was offered in increasing volumes. The U.S. Department of Agriculture in its weekly Crop Progress report indicated the winter wheat harvest on July 24 was 80% completed in Colorado (82% as the recent ﬁve-year average for the date), 66% in Nebraska (84%), and 29% in South Dakota (56%). Combining was yet to begin in Montana versus a ﬁve-year average for that state of 17% completed.

HARD SPRING. Premiums on hard red spring wheat quoted as delivered Chicago/beyond values in relation to the Minneapolis September wheat future were 50c a bu higher to 20c lower last week. The market’s undertone remained mostly weak following losses during the previous couple of weeks. The U.S.D.A. indicated in its weekly Crop Progress report that spring wheat headed in the six key states by July 24 was 83% versus 95% as the recent ﬁve-year average for the date. Wheat headed was 72% in North Dakota (90% as the average for the date), 96% in South Dakota (100%), 98% in Minnesota (97%), 72% in Montana (90%), 95% in Idaho (92%) and 92% in Washington (100%). Spring wheat condition in the six states was rated 74% good to excellent (compared with 73% a week earlier and 83% a year ago), 21% fair and 5% poor to very poor. Wheat rated good to excellent was 77% in North Dakota, 73% in South Dakota, 69% in Minnesota, 61% in Montana, 89% in Idaho and 84% in Washington. The Wheat Quality Council spring wheat tour, on the basis of assessment of more than 400 ﬁelds across North Dakota, forecast an average other-spring wheat yield this year at 41.5 bus per acre compared with 46.1 bus per acre as the actual U.S. year-ago average other-spring wheat yield. The U.S.D.A.’s estimate of 2010 average other-spring wheat yield in North Dakota was 44 bus per acre. Tour participants saw a crop whose progress was behind the normal pace

because of late planting. They observed disease pressure that was signiﬁcant at some locations, particularly across southern North Dakota, where the crop was planted in very wet conditions. Standing water was said to be evident in several ﬁelds. The rail freight discount for unloading in Minneapolis compared with the delivered Chicago/beyond rate remained 15c a bu and the spread between unloading in Duluth and the Chicago/beyond rate remained 25c. SOFT RED. Bids on soft red winter wheat were mostly steady. In Kansas City, No. 1 soft red bids held at 70@10c under K.C. September. Gulf bids on soft red for July advanced 8c a bu, to 43c over Chicago September. St. Louis mill bids were 30c over Chicago September. Chicago mill bids were unchanged at 10c under Chicago September. Mill bids in Toledo for nearby were 30c over Chicago September. Elevator bids were 5c over Chicago September for nearby. Cincinnati nearby mill bids declined 10c, to 10c under Chicago September. Elevator bids for nearby were 27c under Chicago September. Michigan white wheat mill bids for nearby were unchanged at 40c over Chicago September. The winter wheat harvest across Missouri and Indiana was concluded by July 24, according to the U.S.D.A. Combining was 98% completed in Illinois (98% as the average for the date), 99% in Ohio (99%) and 67% in Michigan (73%). FBN

No. 1 hard spring
Basis Minneapolis Sept., delivered Chicago/beyond cents per bu July 29 — Change from — Year Premium July 22 July 15 ago Ordinary . . . ... ... … 11% ... ... ... … 12% ... ... ... -70 @ -40 13% 75@ 120 +10 @ +35 -30 @ -5 -40 @ -20 13.5% 100@ 110 -20 @ -15 -65 @ -140 -10 @ 10 14% 125@ 200 … -125 @ -160 40 @ 85 14.5% 200 ... -150 @ -175 110 15% 290@ 350 -10 @ +50 -170 @ -175 200 @ 240 16% ... ... ... 250

Cash wheat
July 29 — Change from — Year For shipment Bid July 22 July 15 ago No. 1 Soft White, Track, Portland $ per bu July ... ... ... … August 6.94 -.09 -.08 5.30 September 6.97 -.09 -.09 5.45 No. 1 Hard 11.5%, Track, Portland Basis Kansas City future, cents per bu July 0.20 -.20 -.25 -0.55 August 0.25 — — -0.55 September 0.30 — — -0.30 No. 1 Spring 14%, Track, Portland Basis Minneapolis future, cents per bu July 1.90 -.30 -.50 … August 1.75 -.15 -.15 … September 1.55 — -.20 …

No. 1 hard winter
Basis Kansas City Sept., cents per bu July 29 — Change from — Premium July 22 July 15 Ordinary -5 @ 10 -5 @ -5 -35 @ -35 11% 7 @ 22 — -28 @ -28 11.2% 7 @ 22 — -30 @ -30 11.4% 7 @ 22 — -35 @ -35 11.6% 27 @ 42 +12 @ +12 -21 @ -21 11.8% 35 @ 50 +5 @ +5 -25 @ -25 12% 50 @ 65 — -10 @ -10 12.2% 50 @ 65 — -10 @ -10 12.4% 50 @ 65 -5 @ -5 -10 @ -10 12.6% 50 @ 65 -5 @ -5 -20 @ -20 12.8% 50 @ 65 -5 @ -5 -20 @ -20 13% 60 @ 75 +5 @ +5 -10 @ -10 13.2% 60 @ 75 +5 @ +5 -10 @ -10 13.4% 60 @ 75 +5 @ +5 -15 @ -15 13.6% 60 @ 75 +5 @ +5 -25 @ -25 13.8% 80 @ 95 +25 @ +25 -35 @ -35 14% 110 @ 125 +5 @ +5 -45 @ -45 Year ago -85 @ -70 -85 @ -70 -85 @ -70 -85 @ -70 -80 @ -65 -80 @ -65 -65 @ -50 -65 @ -50 -45 @ -30 -40 @ -25 -40 @ -25 -35 @ -20 -15 @ 0 -5 @ 10 22 @ 37 36 @ 51 51 @ 66

Exporter bids and offers
For July 29 shipment Bid Offer No. 1 Hard 12%, Track Gulf Basis Kansas City future, cents per bu July … … August +78 Sep. … September +78 Sep. … October +75 Dec. … No. 2 Soft Red, c.i.f. New Orleans Basis Chicago future, cents per bu July +43 Sep. 50 August +45 Sep. 51 September +60 Sep. 72 October +50 Dec. … Year ago bid

Canadian domestic milling wheat
… … … +12 Dec. Change from Year In-store, Thunder Bay, July 29 July 22 ago Canadian $ per tonne Western red spring 13.5% 361.50 -12.69 280.83 Soft white spring 275.11 -4.20 257.10 Amber durum 551.98 -24.10 240.09 U.S. $ per bu Western red spring 13.5% Soft white spring Amber durum 10.32 7.85 15.75 -0.40 -0.15 -0.75 7.43 6.80 6.35

… +18 Sep. +30 Sep. +20 Dec.

August 2, 2011

FOODBUSINESS NEWS

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Food Business News - August 2, 2011

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