Food Business News - December 6, 2011 - 51

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

Cash Wheat
HARD WINTER. Premiums on hard red winter wheat in Kansas City were 28c a bu higher to 7c lower last week. The March future became the basic contract at an 11c premium to the December. The widest gains were scored at the lowest protein levels. Certain interior terminal elevators were said to have sought lower-protein wheat, and export bids were stronger, which provided a boost. Adjustments across the rest of the protein scale were mixed. Mills sought to keep pipelines optimally ﬁlled as they awaited shipments against December wheat contracts. The hard winter wheat basis remained historically strong and derived support from ongoing substitution of hard winter wheat for more expensive spring wheat of equivalent protein by mills in the mixing of certain ﬂour blends. In its last weekly Crop Progress report of the season, the U.S. Department of Agriculture indicated winter wheat emergence by Nov. 27 (in states where emergence wasn’t already 100%) was 97% in Kansas (96% as the recent ﬁve-year average for the date), 97% in Oklahoma (93%), 74% in Texas (82%), 99% in Colorado (99%) and 90% in Montana (97%). Wheat rated good to excellent on Nov. 27 was 47% in Kansas (40% fair), 56% in Oklahoma (34% fair), 25% in Texas (35% fair), 74% in Nebraska (24% fair), 50% in Colorado (40% fair), 63% in South Dakota (32% fair) and 37% in Montana (55% fair). Rain in recent weeks improved crop condition in Oklahoma, but effects of the drought lingered. Topsoil moisture in the state was rated 60% adequate to surplus on Nov. 27 compared with 44% a week earlier, but subsoil moisture was 82% short to very short. Despite recent rain in Texas, most of the state remained in severe to exceptional drought.

As the Kansas hard winter wheat crop approached dormancy, there remained drought-stressed areas even after recent rains. In particular, southwest Kansas soil moisture still was very poor. Topsoil moisture in this area on Nov. 27 was only 13% adequate compared with 87% short to very short (62% very short). Subsoil moisture in the district was only 5% adequate compared with 95% short to very short (75% very short). The south central and west central regions also were exceptionally dry. In contrast, northern areas of the state, from west to east, had good soil moisture as winter approached. A threat of a nationwide rail strike was averted last week. Facing an end-of-day Dec. 5 deadline, railroads came to terms with 12 of 13 unions involved in collective bargaining for new contracts. A 60-day “cooling off” period ordered by the federal government was to end on Dec. 5, but the sole union that still has not come to terms with the rail carriers, the Brotherhood of Maintenance of Way Employees, agreed to extend talks at least until February. HARD SPRING. Premiums on hard red spring wheat quoted as delivered Chicago/ beyond values in relation to the Minneapolis March wheat future were 15c a bu higher to 125c lower last week. The sole gain was posted at the low end of the premium range on 13%-protein wheat. Otherwise, premiums dropped 30@125c. Increased offers pressured the cash spring wheat basis. It didn’t take much additional supply to apply weight given the

ongoing substitution of less expensive hard winter wheat for spring wheat of equivalent protein by mills mixing certain ﬂour blends or ﬂour of a speciﬁed protein not requiring spring wheat ﬂour. It was thought most bushels moving into marketing channels were owned by elevators. No broad expansion in farmer wheat selling was expected before the end of the year, and producers had other crops to sell from the fall harvest. SOFT RED. Mill bids on soft red winter wheat were mostly unchanged. In Kansas City, No. 1 soft red bids were 66c under Kansas City March to 6c under, unchanged. Gulf bids on soft red for December were 52c over Chicago March. St. Louis mill bids held at 45c over Chicago December. Chicago mill bids were unchanged at 10c over Chicago December. Mill bids in Toledo for nearby were 35c over Chicago December. Elevator bids were the Chicago December price for nearby. Cincinnati nearby mill bids were unchanged at 10c under Chicago December. Elevator bids for nearby were 15c under Chicago December. Michigan white wheat mill bids for nearby were at 10@40c over Chicago December. The U.S.D.A. indicated winter wheat emergence by Nov. 27 was 90% in Missouri (80% as the average for the date), 98% in Illinois (93%), 97% in Indiana (92%), 90% in Ohio (96%) and 100% in Michigan (95%). Winter wheat rated good to excellent was 44% in Missouri (48% fair), 81% in Illinois (18% fair), 74% in Indiana (25% fair), 36% in Ohio (49% fair) and 78% in Michigan (17% fair). FBN

No. 1 hard spring
Basis Minneapolis March, delivered Chicago/beyond cents per bu Dec. 2 — Change from — Year Premium Nov. 25 Nov. 18 ago Ordinary ... ... ... … 11% ... ... ... … 12% ... ... ... -15 @ -10 13% 100 +15 @ -30 ... 0 13.5% ... ... ... 70 @ 90 14% 125 @ 150 -50 @ -60 -60 @ -75 115 14.5% ... ... ... 180 @ 225 15% 160 @ 175 -70 @ -125 -40 @ -75 320 @ 335 16% ... ... ... …

Cash wheat
Dec. 2 — Change from — For shipment Bid Nov. 25 Nov. 18 No. 1 Soft White, Track, Portland $ per bu September ... ... ... January 6.05 +.17 +.15 February 6.07 +.17 +.15 No. 1 Hard 11.5%, Track, Portland Basis Kansas City future, cents per bu September 0.50 -.05 -.05 January 0.50 -.05 -.05 February 0.52 -.03 -.03 No. 1 Spring 14%, Track, Portland Basis Minneapolis future, cents per bu September 1.40 +.05 +.05 January 1.40 — — February 1.40 — — Year ago

No. 1 hard winter
Basis Kansas City March, cents per bu Dec. 2 Premium Ordinary 62 @ 77 11% 62 @ 77 11.2% 62 @ 77 11.4% 94 @ 109 11.6% 101 @ 116 11.8% 109 @ 124 12% 120 @ 135 12.2% 120 @ 135 12.4% 120 @ 135 12.6% 127 @ 142 12.8% 127 @ 142 13% 130 @ 145 13.2% 133 @ 148 13.4% 133 @ 148 13.6% 138 @ 153 13.8% 145 @ 160 14% 185 @ 200 — Change from — Nov. 25 Nov. 18 +28 @ +28 +35 @ +35 +13 @ +13 +20 @ +20 +13 @ +13 +13 @ +13 -7 @ -7 -7 @ -7 — — -3 @ -3 -3 @ -3 +3 @ +3 +6 @ +6 +3 @ +3 +6 @ +6 +3 @ +3 +6 @ +6 +6 @ +6 +8 @ +8 +5 @ +5 +5 @ +5 +2 @ +2 +8 @ +8 +5 @ +5 +4 @ +4 +4 @ +4 -1 @ -1 -4 @ -4 -4 @ -4 +3 @ +3 +3 @ +3 -4 @ -4 -4 @ -4 Year ago -47 @ -32 -47 @ -32 -44 @ -29 -29 @ -14 -26 @ -11 -11 @ 4 -2 @ 13 -2 @ 13 -2 @ 13 -2 @ 13 3 @ 18 10 @ 25 20 @ 35 25 @ 40 29 @ 44 31 @ 46 31 @ 46

… 7.20 7.20 0.00 0.00 0.00 … 1.55 1.55

Exporter bids and offers
For Dec. 2 shipment Bid Offer No. 1 Hard 12%, Track Gulf Basis Kansas City future, cents per bu December +110 March … January +107 March … February +105 March … March +105 March … No. 2 Soft Red, c.i.f. New Orleans Basis Chicago future, cents per bu December +52 March 54 January +60 March 65 February +65 March 70 March +67 March 70 Year ago bid

Canadian domestic milling wheat
… … +45 March +45 March In-store, Thunder Bay, Canadian $ per tonne Western red spring 13.5% Soft white spring Amber durum U.S. $ per bu Western red spring 13.5% Soft white spring Amber durum Dec. 2 377.05 267.05 496.75 10.10 7.15 13.30 Change from Year Nov. 25 ago -5.39 345.71 +5.02 295.71 -23.45 347.46 0.17 0.35 -0.20 9.35 8.00 9.40

65 +65 +60 +60

March March March March

December 6, 2011

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Food Business News - December 6, 2011

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