Food Business News - August 14, 2012 - 53

Market commentary for one-week period ended August 10, 2012

Cash Wheat
HARD WINTER. Premiums on hard red winter wheat in Kansas City were unchanged to 10c a bu higher last week. The advances were scattered across the bottom two thirds of the protein scale with ordinary wheat registering its gain at the week’s outset. Advances across the middle of the protein scale came in installments and reflected a slowing pace of wheat movement onto the spot market even as mills sought to keep pipelines optimally filled. Not all mills were active in the spot market, though, with shipments of wheat for application against August contracts continuing. High-protein wheat offers were sparse, leaving the top third of the protein scale with little test. Resellers were active from time to time seeking wheat on the spot market to fulfill their obligations to the mills. There was no large-volume business completed in the market for to-arrive wheat, although there were a few additional sales of South Dakota and North Dakota hard winter wheat for October-December to Eastern mills across the Chicago gateway. The hard red winter wheat harvest in Montana was 45% completed by Aug. 5 compared with 30% a week earlier and 32% as the recent five-year average for date. The harvest in the other principal states was completed earlier. The corn and sorghum harvests expanded. The Kansas corn harvest was 7% completed by Aug. 5 compared with 2% a week earlier and zero as the recent five-year average for the date. The Kansas corn harvest’s start was the earliest on record. The Oklahoma corn harvest was 15% completed compared with zero as the recent average. The Texas corn harvest was 35% completed compared with 22% as the average for the date, and the sorghum harvest was 54% completed compared with 42% as the average. Rain that fell across northern sections

of the hard red winter wheat region during the previous week added to soil moisture only slightly, and much of the region remained in the grip of severe to exceptional drought, including Kansas, Oklahoma, Nebraska and Colorado. Kansas Agricultural Statistics on Aug. 6 indicated, “Topsoil moisture supplies increased slightly to 69% very short, 25% short, 6% adequate and none as surplus. Kansas subsoil moisture supplies remained steady at 67% very short, 28% short, 5% adequate and none as surplus.” There was time for rain to improve soil moisture profiles before planting begins, but rain in amounts that will make much difference was far from a certainty. HARD SPRING. Premiums on hard red spring wheat quoted as delivered Chicago/beyond values in relation to the Minneapolis September wheat future advanced 25@35c a bu last week. Wheat offers on the spot market declined from recent weeks as growers were fully engaged with harvesting or preparing to harvest their spring wheat, and sales across the scale weren’t yet heavy enough to exert pressure on the basis. It was expected the pace of farmer wheat sales will quicken. While winter wheat growers had ample space to store their wheat given the drought exacting a severe toll on fall crop prospects, space was more of a concern across the northern Plains, where many bins may have to be cleared to accommodate the row crops once the fall harvest begins.

The spring wheat harvest in the six key states was 47% completed by Aug. 5 compared with 28% a week earlier and 12% as the recent five-year average for the date. Wheat condition in the six states as an aggregate was rated 63% good to excellent, the same as a week earlier and compared with 66% a year ago. The U.S.D.A. on Aug. 10 forecast 2012 hard red spring wheat production at 462,582,000 bus, up 6% from the July forecast and up 16% from 397,689,000 bus in 2011. The recent five-year average outturn was 496 million bus. SOFT RED. Mill bids on soft red winter wheat were mostly unchanged last week. In Kansas City, No. 1 soft red bids were 31c under K.C. September to 19c over, unchanged. Gulf bids on soft red for August were 25c over Chicago September, up 12c. St. Louis nearby mill bids were 5c over Chicago September, unchanged. Chicago mill bids were 25c over Chicago September, unchanged. Mill bids in Toledo for nearby were 10c over September, unchanged. Elevator bids were 2c under Chicago September. Cincinnati nearby mill bids were 15c under Chicago September, down 20c. Elevator bids were 10c under Chicago September. Michigan white wheat mill bids for nearby were from 15c under Chicago September to 50c over. The corn harvest began 25 days ahead of the normal starting date in Missouri. The corn harvest was 6% completed by Aug. 5 in Missouri (zero as the five-year average for the date). FBN

No. 1 hard spring
Basis Minneapolis Sept., delivered Chicago/beyond cents per bu Aug. 10 — Change from — Year Premium Aug. 3 July 27 ago Ordinary ... ... ... … 11% ... ... ... … 12% ... ... ... 30 @ 40 13% 50 +35 @ +30 +20 60 @ 75 13.5% ... ... ... 85 14% 50 +35 @ +30 +20 @ 0 … 14.5% ... ... ... 95 15% 55 @ 80 +25 @ +30 +10 @ +25 155 16% ... ... ... …

Kansas City hard winter premiums, 12.2%
September, cents per bu
150 130 110 90 70 50 A N F M

No. 1 hard winter
Basis Kansas City Sept., cents per bu Aug. 10 — Change from — Premium Aug. 3 July 27 Ordinary 25 @ 40 +10 @ +10 +15 @ +15 11% 33 @ 48 — +1 @ +1 11.2% 35 @ 50 — — 11.4% 50 @ 65 +5 @ +5 +5 @ +5 11.6% 50 @ 65 +3 @ +3 +3 @ +3 11.8% 50 @ 65 +2 @ +2 — 12% 50 @ 65 +2 @ +2 -8 @ -8 12.2% 50 @ 65 +2 @ +2 -8 @ -8 12.4% 57 @ 72 +9 @ +9 -1 @ -1 12.6% 57 @ 72 +9 @ +9 -8 @ -8 12.8% 65 @ 80 — — 13% 75 @ 90 +5 @ +5 +5 @ +5 13.2% 80 @ 95 — — 13.4% 85 @ 100 — — 13.6% 85 @ 100 — — 13.8% 85 @ 100 — — 14% 85 @ 100 — — Year ago 19 @ 34 20 @ 35 20 @ 35 40 @ 55 45 @ 60 58 @ 73 65 @ 80 65 @ 80 65 @ 80 65 @ 80 65 @ 80 78 @ 93 78 @ 93 78 @ 93 80 @ 95 85 @ 100 88 @ 103

Cash wheat
Aug. 10 — Change from — Year For shipment Bid Aug. 3 July 27 ago No. 1 Soft White, Track, Portland $ per bu August 8.75 -.05 -.15 … September 8.75 -.05 -.15 7.15 October 8.75 -.05 -.15 7.18 No. 1 Hard 11.5%, Track, Portland Basis Kansas City future, $ per bu August ... ... ... … September 0.58 — +.03 … October 0.45 — -.10 0.45 No. 1 Spring 14%, Track, Portland Basis Minneapolis future, $ per bu August ... ... ... … September 0.60 — -.15 … October 0.70 — -.20 1.30

Exporter bids and offers
For Aug. 10 shipment Bid Offer No. 1 Hard 11%, Track Gulf Basis Kansas City future, cents per bu August … … September +102 Sep. … October +102 Dec. … November +102 Dec. … No. 2 Soft Red, c.i.f. New Orleans Basis Chicago future, cents per bu August +25 Sep. 35 September +45 Sep. 55 October +50 Dec. … November +50 Dec. … Year ago bid

… +95 Sep. +90 Dec. +90 Dec.

+30 +50 +40 +50

Sep. Sep. Dec. Dec.

August 14, 2012

FOODBUSINESS NEWS

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Food Business News - August 14, 2012

Table of Contents for the Digital Edition of Food Business News - August 14, 2012
