Food Business News - December 6, 2011 - 46

Ingredient Markets
Market commentary for one-week period ended December 2, 2011

Sweeteners
Attention remained on 2012 contracting of corn sweeteners as the bulk reﬁned sugar business remained quiet last week. Additional 2012 contracting of wet corn sweetener products, including regular corn syrup and 42% high-fructose corn syrup, was completed before the Thanksgiving break, and contracting resumed last week. Well more than 50% of contracting has been completed, and trade sources expected business to be mostly wrapped up by the end of the year. Industry sources indicated 2012 contracts have been coming in at an average of 10% above 2011 levels for products other than 55% HFCS with prices ranging from about ﬂat to more than 20% or even 25% higher. That equated roughly to a $2-a-cwt increase from 2011 for 42% HFCS, which compared with a $4 hike for dextrose. It appeared prices may advance further the longer buyers wait to ﬁnalize contracts, unlike last year when later contracts came in lower. Increased regional or zone pricing complicated price discovery, as did reﬁners’ decisions to base 55% HFCS offers on available supply at the time of negotiation rather than issue list prices. Contracting of most dry corn sweetener products, including dextrose, was completed a few weeks earlier. Sugar markets remained in a lull after the holiday week. Domestic bulk reﬁned sugar for spot through Dec. 31, 2012, was offered at around 59c a lb f.o.b. but still could be

bought at levels somewhat below that, at around 55c, for next year, even though supplies still were considered tight. Union members remained locked out of American Crystal Sugar Co. plants, which were operating with replacement workers. With the sugar beet harvest completed, attention was turned to processing with favorable weather for beet piles noted. Louisiana sugar cane was 72% harvested as of Nov. 27, a week ahead of 64% last year and about two weeks ahead of 57% as the 2006-10 average, the state’s U.S.D.A. ﬁeld ofﬁce said. The cane harvest also progressed in Florida and other states. Trade sources indicated supplies of reﬁned sugar continued to ﬂow into the United States from Mexico, mainly going to distributors, but that shipments of “estandar” that require further reﬁning have slowed. Sugar prices in Mexico have eased as the cane harvest there gained momentum early in the new season. Mexico’s Agriculture Ministry last week forecast Mexico’s 2011-12 sugar crop at 5.34 million tonnes, up 3% from a year earlier due to a larger harvested area. The cane harvest there began Oct. 31. The U.S. Department of Agriculture will issue revised U.S. and Mexican sugar supply-and-demand data on Dec. 9. FBN

Edible Oils
Bookings of edible oils were limited last week. Price changes were mixed.

Soybean oil prices advanced. Soybean oil futures prices bounced from the previous week’s wide losses in sympathy with gains across the rest of the soy complex. Agricultural commodity futures prices overall advanced in the wake of wide gains in equity markets and a decline in the value of the dollar from highs posted during the previous week. Crude oil futures also registered gains and traded above $100 a barrel once again after declining the previous week. The cash basis on soybean oil remained stubbornly ﬁrm even in the face of the impending demise of the $1-per-gallon biodiesel blenders’ credit at the end of the year. Several soybean oil users a week earlier extended contract balances into JanuaryMarch. Others covered futures against prospective contracts but shied away from completing bookings because of the strong cash basis. Individual small users with budgets to protect recently extended coverage deep into 2012. The U.S. Department of Agriculture indicated net export sales of U.S. soybean oil in the week ended Nov. 24 was 8,900 tonnes with Caribbean nations the buyers. Canola oil suppliers were mostly sold out through December, and supplies were said to be tight even into January-March. Palm oil prices declined. Baking seasonrelated demand eased. Palm oil encountered decreased buying by China even as production was declining seasonally. Lard and edible tallow prices were unchanged. FBN

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

Sweeteners
Delivered basis, cents per lb HFCS spot price1

HFCS list price2 Regular — Change from — Year corn Dec. 2 Nov. 25 Nov. 18 ago syrup3 Dextrose 42% HFCS wet 55% HFCS wet Dec. 2 Year ago Midwest beet 58.50 @ 59.00 — — 57.00 21.375 24.875 net 153/8@ 193/8 153/8@ 193/8 29.85@33.85 24.625 East Paciﬁc beet 58.50 @ 59.00 — — 57.00 Midwest 22.925 26.425 net 28.85@32.85 26.175 Midwest Cane* 58.50 @ 59.00 — — 57.00 Northeast 16¾@ 20¾ 16¾@ 20¾ 23.125 26.625 net *Spot raw plus 7% plus 17.5c with 2% cash discount. Southeast 167/8@ 207/8 167/8@ 207/8 31.85@35.85 26.375 West 22.625 26.125 net Southwest 16½@ 20½ 16½@ 20½ 25.875 Raw cane 23.325 26.825 net West 173/8@ 213/8 173/8@ 213/8 26.575 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 January-March April-June July-September October-December January-March — Change from — Dec. 2 Nov. 25 Nov. 18 37.35 +.35 -.35 37.35 +.20 -.30 37.30 -.25 -.70 37.45 +.15 -.55 37.50 -.25 -.25 34.55 +.15 +.15 Year ago 38.40 38.40 37.75 36.85 34.75 32.70

Chicago soybean oil futures
Bulk in tank cars, cents per lb Dec. 2 — Change from — Delivery close Nov. 25 Nov. 18 December 50.05 +1.82 -.83 January 50.25 +1.81 -.87 March 50.65 +1.78 -.83 May 50.99 +1.80 -.83 July 51.29 +1.82 -.82 August 51.34 +1.77 -.84 Year ago 53.08 53.45 53.89 54.20 54.44 54.52

Edible oils
Bulk, cents per lb — Change from — Year Dec. 2 Nov. 25 Nov. 18 ago Soybean oil, Decatur 50.75 Loose lard, Chicago 50.00 Edible tallow, Chicago 49.00 Cottonseed oil, Miss. PBSY 50.50 Palm oil, ports 51.50 Palm kernel oil, ports 57.00 Coconut oil 57.00 Peanut oil, Southeast 100.00 Corn oil, Decatur 54.50 Sunﬂowerseed oil, Midwest 91.00 Canola oil, Midwest 55.25 +1.50 — — +2.25 -.50 -.25 — +2.00 -1.00 — +1.00 -1.25 -.25 -1.00 -.50 -.50 -.25 — 49.50 38.00 44.00 52.00 57.00 62.50 73.00

Spot soybean oil
Decatur, Ill., bulk cents per lb
63.00 53.00 43.00 33.00 23.00 D M J
Previous Year

Crude soybean oil
Bulk in tank cars, cents per lb Delivery Decatur, Ill. December 50.55 @50.80 January 50.75 @51.00 February 50.95 @51.20 March 51.15 @51.40 April 51.32 @51.57 May 51.49 @51.74 June 51.64 @51.89 Western points 50.05 @50.30 50.25 @50.50 50.45 @50.70 50.65 @50.90 50.82 @51.07 50..99 @51.24 51.14 @51.39

+3.00 75.50 -.25 55.50 — -.75 63.00 56.00

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Food Business News - December 6, 2011

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