Food Business News - February 28, 2012 - 61

Market commentary for one-week period ended February 24, 2012

Wheat Futures
Wheat futures prices declined on all three exchanges last week, led by sharp losses in nearby Minneapolis spring wheat contracts, which sank to a 14-month low Friday. Domestic and global supply fundamentals remained, or became even more bearish. The pressure on Minneapolis spring wheat resulted from an expected slight boost in moisture across the region from a forecast weekend snow storm and from ideas of increased 2012 spring wheat seedings in the United States and Canada. Although a slight bump in soil moisture was anticipated for the Upper Midwest, a meteorologist addressing Kansas City Board of Trade members last week suggested the region would remain drier than normal. Traders suggested even slight moisture improvement may be enough to allow farmers to get the crop planted before forecast improved moisture conditions later in the spring. Also adding pressure to spring wheat futures, as well as some to Kansas City hard winter wheat futures, were higher forecast U.S. 2012 wheat planted and harvested area and production by the U.S. Department of Agriculture at its annual Agricultural Outlook Forum last week. The U.S.D.A. forecast wheat planted area for harvest in 2012 at 58 million acres, up from its earlier baseline forecast of 56.5 million

acres and well above 54.4 million acres in 2011. Harvested area was forecast at 48.7 million acres, up from 47.5 million acres previously and from 45.7 million acres in 2011. With winter wheat seeded last fall and area already pretty well known, traders suggested most of the additional 2012 wheat area would be spring wheat and durum acres. The forecast increase in spring wheat area and production added pressure to hard red winter wheat because hard red winter has been used extensively as a substitute for higher-priced spring wheat this season. World wheat fundamentals worsened U.S. export prospects last week. The International Grains Council increased its forecast 201112 global wheat production by 5 million tonnes to a record 695 million tonnes mainly due to production increases in Australia, Kazakhstan and India. Although up from 2010-11, the I.G.C. revised its forecast for 2011-12 global wheat consumption down from its prior forecast. Global wheat ending stocks were forecast to rise as a result. A survey of private analysts last week indicated Canadian farmers intended to boost all wheat plantings in 2012 by 10% from 2011. MBN

Millfeed
Millfeed prices mostly advanced, some sharply, on tight to lacking supplies as

the result of a loss of ﬂour grind from the Presidents’ Day holiday, maintenance and fumigations. Spot prices were unquoted or nominal in many areas, and millfeed often was unavailable, which was unusual for the date. Spot prices nominally soared $30 a ton or more for truck material in the Southwest and Northeast. Prices in other markets were up about $10@20 with the exception of the West coast, where values held steady or even eased slightly. In the Southwest the acute lack of supply resulted in several “washouts,” undelivered loads of previously sold material, and one major mill was said to have been oversold. Spot quotes also soared in the Northeast as a major mill that typically runs six to seven days was down most of the week for maintenance. The loss of grind occurred just as millfeed had regained a strong foothold in livestock feed formulations. Slightly increased trading was seen in deferred periods as new ﬂour bookings for the summer in some areas eased mills’ reluctance to sell millfeed too far forward. Millfeed was nominally $140 a ton in Kansas City and $162 in Minneapolis, on a rail basis, compared with corn at $234 a ton and sorghum at $214 a ton, both K.C. Corn gluten feed was up $5 at $170 a ton, distillers’ dried grain rose $3 to $218 a ton, and dehydrated alfalfa held at $310 a ton, all in K.C. FBN

Wheat futures
$ per bu; change in cents per bu Feb. 24 Kansas City March May July September Chicago March May July September Minneapolis March May July September 6.81 6.88¼ 6.96½ 7.10¼ 6.41 6.41¼ 6.53 6.69½ 7.86½ 7.92½ 7.89¼ 7.81 — Change from — Week’s Feb. 17 Feb. 10 High Low -8½c -8½c -7½c -7½c -3c -6½c -6¾c -7½c -35¾c -24¾c -19¾c -9¼c +8c +7¼c +7½c +8½c +11c +3¼c +4½c +4½c -27¾c -10½c -1½c +18¼c 6.92¼ 6.99¼ 7.06¼ 7.18¼ 6.48¾ 6.52¼ 6.65 6.80 8.25 8.20¾ 8.13¼ 7.93¼ 6.70¼ 6.77¼ 6.85¼ 6.99¾ 6.23½ 6.28 6.40 6.59 7.83 7.88½ 7.85¾ 7.73 Year ago 8.87½ 8.99 9.09 9.23¼ 7.76½ 8.11¼ 8.41 8.70½ 9.15¾ 9.28½ 9.36¼ 9.39¼ High 10.14¼ 10.01½ 9.97½ 9.84 9.54¾ 9.25½ 9.57½ 9.63¼ 10.55¾ 10.56 10.55 9.90¼ Season’s Low (05-26-11) (02-09-11) (05-26-11) (05-26-11) (05-26-11) (02-09-11) (05-26-11) (05-26-11) (05-26-11) (05-26-11) (05-26-11) (05-26-11) 5.03 5.15¼ 5.90 6.66½ 5.05 5.21 6.13 6.31¼ 5.32¼ 5.43¼ 6.74¼ 7.09½ (06-11-10) (06-11-10) (03-31-10) (12-16-11)

Kansas City wheat futures
March contract, $ per bu
10.50 8.50 6.50 4.50 F M A
Previous Year

N
Current Year

(06-11-10) (06-11-10) (12-15-11) (12-15-11) (06-09-10) (06-09-10) (07-15-10) (10-05-10)

Chicago wheat futures
March contract, $ per bu
$10.25 $8.75 $7.25 $5.75

Bulk middlings
$ per ton, delivered rail unless noted All spot prices are nominal. Kansas City Southwest, f.o.b. truck Minneapolis Upper Midwest, f.o.b. truck Chicago West Central states, f.o.b truck Buffalo Southeast N. & S. California Los Angeles, f.o.b. truck Paciﬁc Northwest Upper Midwest, sacked Wheat germ Spot 140 @ 150 185 @ 195 162 @ 172 158 @ 168 175 @ 185 178 @ 188 165 @ 180 145 @ 150 175 @ 185 171 @ 181 185 @ 205 255 295 @ 315 Feb. 140@ 150 185@ 195 162@ 172 158@ 168 175@ 185 178@ 188 165@ 185 145@ 150 175@ 185 171@ 181 180@ 200 — Change from — Year Feb. 17 Feb. 10 ago +7 @ +12 +14 @ +18 148 @ 155 +30 @ +30 +45 @ +50 175 @ 180 +13 @ +13 +28 @ +31 148 @ 154 +13 @ +13 +28 @ +31 144 @ 150 +13 @ +13 +28 @ +31 161 @ 167 +23 @ +23 +38 @ +43 145 @ 153 +35 @ +40 +50 @ +55 126 @ 136 +15 @ +10 +25 @ +23 133 @ 139 +1 @ +1 +2 @ -3 180 @ 190 +1 @ +1 +2 @ -3 176 @ 186 — 0 @ +5 155 @ 165
F M A N

$4.25

Mar. 135@ 145 160@ 165 152@ 162 148@ 158 165@ 175 155@ 165 135@ 150 135@ 140 165@ 180 161@ 176 175@ 195

Apr.-June 113 @ 119 125 @ 130 134 @ 144 130 @ 140 147 @ 157 125 @ 135 112 @ 122 113 @ 118 150 @ 165 146 @ 161 150 @ 170

July-Sept. Previous Year Current Year 114 @ 121 Week's change (cents per bu) Minneapolis wheat futures 130 @ 135 139 @ 149 March contract, $ per bu 135 @ 145 152 @ 162 125 @ 135 100 @ 110 …@ … …@ … …@ … 150 @ 170
F M A N
Previous Year Current Year

$10.50 $8.50 $6.50 $4.50

February 28, 2012

FOODBUSINESS NEWS

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Food Business News - February 28, 2012

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