Food Business News - November 20, 2012 - 61

Ingredient Markets
Market commentary for one-week period ended November 16, 2012

Soy Products
Soy ﬂour prices followed the soy complex sharply lower last week. Demand remained steadily strong, and bookings were three to four weeks forward with buyers continuing to seek relatively inexpensive sources of protein. Soybean futures declined last week after plunging Nov. 9 on news that the U.S. Department of Agriculture raised its estimate of the size of the U.S. soybean crop. Ideas that the 2012 drought did not hurt the crop as much as initially feared and prospects for large South American crops kept pressure on prices. Despite supportive news about export sales, fresh demand at lower levels and strong domestic crush in October, soybean futures prices continued to fall. Toward the week’s end, nearby futures were at ﬁve-month lows before dropping even further on Friday. Prices ended the week down about 8% from Nov. 8 (prior to the U.S.D.A. report) and down 22% from record highs posted two months earlier. Favorable weather outlooks for Brazil and Argentina, the largest soybean producers after the United States, were bearish for soy complex futures, as was evidence that China cancelled some soybean purchases amid ﬂagging demand and weak crushing margins. Outside markets turned cautious as tensions rose in the Middle East and concerns in the United States focused on how to pull back from the “ﬁscal cliff.” The 2012 soybean harvest was near its end as of Nov. 11, the U.S.D.A. reported. In the 18 major growing states, 96% of the crop was harvested compared with 93% as the 2007-11 average for the date. U.S. soybean and soybean meal weekly export sales exceeded trade expectations by healthy margins. Net export sales of U.S. soybeans in the week ended Nov. 8 were 559,700 tonnes for 2012-13 and 25,500 tonnes

for 2013-14, the U.S.D.A. said, exceeding trade estimates of 200,000 to 400,000 tonnes. FBN

Corn Products
Prices of most corn products followed corn futures lower. Demand was good as buyers scrambled to meet needs before the Thanksgiving holiday. Mills, too, were “hustling like crazy” to provide ample supplies before taking downtime of as long as four days, which will crimp near-term supplies, a mill executive said. The downtime would likely include maintenance at some plants. Corn futures did not fall as sharply as soybeans last week but ended the week lower despite the outlook for tight world supplies. Prices gyrated within fairly narrow ranges. Declines carried over from the previous week and set off widespread technical selling early last week. Prices then ﬁrmed on ideas corn exports might improve and on strong technical support. Prices ended the week in negative territory, despite slight gains from session lows Friday. News Friday that the Environmental Protection Agency had ruled against a request to waive the renewable fuel standard sparked the expected reactions from opponents and proponents. The E.P.A. said a waiver would only reduce corn prices by 1%, and it stated that the ethanol mandate was causing no economic harm to American farmers. The market was preoccupied with export trends and whether prices had fallen enough to attract demand. China was viewed as a reliable customer, and experts said they believed the European Union would import U.S. corn because of insufﬁcient supplies of feed wheat and tight global supplies of corn. Declines in soybean futures helped keep a lid on corn prices. Corn reached historic highs in August but since trended lower.

Discussion of longer-term trends for corn mostly emphasized the likelihood of higher prices to come until a big crop lessens pressure on global supplies. Relatively high corn values — which some experts predicted may hit $9 a bu within the next six months despite last week’s declines — were viewed as likely to attract a historic number of corn planted acres in 2013. Ultimate crop size again will be determined by what may or may not be a reduction of drought area in the United States. Current weather models show excessively dry conditions remaining in place through much of the country. U.S. weekly corn export sales were modestly above trade expectations that ranged from 100,000 to 300,000 tonnes. Net export sales of U.S. corn during the week ended Nov. 8 were 103,900 tonnes in 2012-13 and 208,200 tonnes in 2013-14, the U.S.D.A. said. FBN

Oats
Food-grade oats ﬂakes prices were lower last week. Oats futures ended the week about ﬂat from a week earlier. One grain executive said he considered oats futures prices undervalued compared to cash oats prices where basis levels have been strong. Seasonal demand for hot breakfast cereal kept a ﬂoor under prices despite this week’s decline. FBN

Rice
Prices of U.S. milled rice and rice byproducts were unchanged last week, the U.S.D.A. said. U.S.D.A. world milled rice prices also were steady. Net export sales of U.S. rice in the week ended Nov. 8 were 77,700 tonnes, down 27% from the previous week and 14% lower than the prior four-week average, the U.S.D.A. said. FBN

Chicago corn and soy futures
Corn Futures $ per bu December March May July September December Soybeans January March May July August September Soybean Meal December January March May July August

Soy products

Rice
offers f.o.b. mills, $ per cwt, bagged — Change from — Year Cash Nov. 16 Nov. 9 Nov. 2 ago Long grain 26.75@28.00 — — 27.00 Medium grain 27.50@28.50 — — 32.50 Parboiled 29.25@33.00 — — 31.00 Second heads, bulk 19.50@20.00 — — 17.00 Brewers 17.00@18.00 — — 14.00 f.o.b. mills, $ per ton Rice millfeed ... ... . . . 90.00 Rice bran 185@200 — — 190.00 Rice hulls 40.00 — — 50.00 U.S.D.A. 2012 crop world price milled - $ per cwt Long grain 19.75 — +0.20 23.00 Medium/short grain 19.47 — +0.21 22.69 Broken 13.98 — +0.15 16.27 C.B.O.T. rough rice futures - $ per cwt January 14.84½ -0.38 -0.16 14.68 March 15.16 -0.37 ½ -0.15 14.97 May 15.44 -0.38 -0.15 ½ 15.25 July 15.62½ -0.36 ½ -0.18 15.52

Defatted, f.o.b. Midwest plant, $ per cwt — Change from — Year — Change from — Nov. 16 Nov. 9 Nov. 2 ago Nov. 16 Nov. 9 Nov. 2 Soy ﬂour 7.27 -11¾ -12½ 6.10¼ Bulk 33.83@33.85 -1.26@-1.74 -1.70@-2.55 7.31 -11 -11½ 6.18 Sacked 34.83 @ 35.85 -1.76@-1.24 -2.57 @-1.68 7.26¾ -12 -12¾ 6.24½ Corn meal 7.15¼ -13¾ -15½ 6.28 6.28½ -23¼ -29 5.83 $ per cwt 6.08¾ -21 -68.25 5.59 — Change from — $ per bu Nov. 16 Nov. 9 Nov. 2 13.83¼ -68 -1.43½ 11.68¼ Chicago, bulk 25.83@ 30.66 -.21@-.24 -.21@-.24 13.68 -68½ -1.35¾ 11.78¼ Chicago, sacked 27.60@ 32.75 -.21@-.24 -.21@-.24 13.51½ -67¾ -1.19¾ 11.88 New York, bulk 27.50@ 32.65 -.21@-.24 -.21@-.24 13.43½ -64½ -1.10½ 11.97 New York, sacked 29.92@ 35.06 -.21@-.24 -.21@-.24 13.20¼ -60 -99 11.95½ 12.89¾ -54¾ -83¾ 11.86½ Oats — Change from — $ per ton Nov. 16 Nov. 9 Nov. 2 424.60 -25.10 -51.30 298.40 Minneapolis 419.00 -26.40 -51.30 300.30 Food grade ﬂakes, f.o.b., 31.25@31.50 -1.25 -1.25 409.20 -27.30 -50.00 303.60 bagged, $ per cwt 399.50 -25.30 -39.90 306.90 Milling quality oats, No. 2 heavy, 3.891/2 1c -21/2c 394.20 -23.50 -35.60 310.80 $ per bu 25@35 — — 385.40 -21.10 -31.90 311.70 Oat hulls, $ per ton

November 20, 2012

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Food Business News - November 20, 2012

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