Food Business News - December 18, 2012 - 51

Market commentary for one-week period ended December 14, 2012

Wheat Futures
Prices of wheat futures tumbled last week, breaking through the lower limit of the trading range that held since mid-July to set five-month lows. The dive was in response to bearish U.S. and world wheat supply-anddemand forecasts for 2012-13 issued on Dec. 11 by the U.S. Department of Agriculture. The U.S.D.A. raised its forecast of U.S. wheat carryover on June 1, 2013, to 754 million bus, up 50 million bus from the November projection and up 11 million bus from 743 million bus in 2012. The increase reflected a 50-million-bu decrease in the forecast for U.S. wheat exports in 2012-13 to 1,050 million bus. The U.S.D.A. pointed to the slow pace of sales and shipments to date this marketing year and stronger than expected competition from foreign suppliers. The U.S.D.A. forecast 2012-13 world wheat ending stocks at 176.95 million tonnes, up 2.77 million tonnes from the November projection but down 10%, from 195.77 million tonnes in 2011-12. The U.S.D.A. forecast 2012-13 world wheat production at 655.11 million tonnes, up 3.68 million tonnes from November because of larger crops in China, Australia and Canada. The U.S.D.A. indicated net export sales of U.S. wheat during the week ended Dec. 6 totaled 518,600 tonnes, up 47% from the

previous week and up 31% from the prior four-week average. Included in the weekly export report was confirmation of a sale of 183,000 tonnes of U.S. soft wheat to Egypt. The export sales aggregate was toward the high end of trade estimates. At the same time, Iraq was said to have purchased Australian and Romanian wheat last week. Saudi Arabia announced it bought 295,000 tonnes of milling wheat, but indications were the U.S. only shared business with Australia and the European Union. The market pondered whether U.S. prices were low enough to encourage an expansion in foreign demand for U.S. wheat and improve upon the newly lowered U.S.D.A. export forecast. Tempering market weakness was ongoing concern over the poor condition of the 2013 hard red winter wheat crop with temperatures alternating between bitter cold and unseasonably warm and with no snow cover on the crop except across the northern Plains. FBN

Millfeed
Prices were irregular in a market preoccupied with logistics and mill grind. Spot prices rose about $20 a ton in the Upper Midwest and about $5 in the Southwest and Central states, but prices declined about $5 in the Northeast and on the West coast.

Grind was expected to range from 4½ to 6 days this week, but traders were unsure how much downtime would occur during the two holiday weeks. Some participants said they thought flour demand would be slack and run times might only be for three days during both weeks. Millfeed supplies would inevitably tighten if grind was cut, and prices would be expected to firm. But uncertainty was rampant, and the vast majority of business was hand to mouth, leading to nearby premiums. A Northeast trader said end-users hoping for lower values would need to buy soon if they wanted to avoid the likely bump in prices during the holiday weeks. Another factor contributing to the unsettled market was a lingering effect of the Hostess Brands liquidation. Flour demand was cut abruptly for some mills when the snack giant closed, and, even several weeks later, there were occasional interruptions in grind because production needs were still lower, traders said. Millfeed was $205a ton in Kansas City and $229 in Minneapolis, on a rail basis, compared with corn at $269 a ton and sorghum at $253 a ton, both K.C. Corn gluten feed was unchanged at $240 a ton, distillers’ dried grain fell $7 to $268 a ton, and dehydrated alfalfa was steady at $360 a ton, all K.C. Wheat germ was steady. FBN

Wheat futures
$ per bu; change in cents per bu Dec. 14 Kansas City December March May July Chicago December March May July Minneapolis December March May July 8.52¼ 8.64¼ 8.74¼ 8.82 8.01 8.14 8.26¼ 8.33 8.84¾ 9.03 9.14 9.21¾ — Change from — Week’s Dec. 7 Nov. 30 High Low -43¾c -45½c -45¼c -42¾c -43¼c -47c -44c -40¾c -32½c -31c -28¾c -28¼c -45¼c -49c -48c -40c -43¾c -49½c -45¾c -37½c -33¾c -33¾c -32¼c -26½c 8.77½ 9.05¼ 9.14¼ 9.22 8.31 8.49 8.60¼ 8.67½ 9.02 9.27¼ 9.36¾ 9.43¼ 8.52¼ 8.58½ 8.69½ 8.77¼ 7.92¼ 8.01½ 8.14¼ 8.22½ 8.84¾ 8.98½ 9.09¾ 9.17¾ Year ago 6.91¾ 6.39½ 6.48 6.55¼ 6.62 5.83¾ 6.03½ 6.20 7.60 8.11¼ 7.93¾ 7.83½ High 9.92¼ 9.86½ 9.85 9.50 9.77¼ 9.82 9.72 9.47 10.34 10.34½ 10.19¼ 10.00 Season’s Low (05-26-11) (05-25-11) (05-25-11) (05-26-11) (05-26-11) (05-26-11) (05-26-11) (05-26-11) (07-23-12) (07-23-12) (07-01-12) (07-20-12) 6.50 6.64½ 6.74 6.80¼ 6.29½ 6.52 6.65 6.63 7.34 7.43 7.53½ 7.60 (05-11-12) (05-14-12) (05-11-12) (05-14-12) (05-14-12) (05-14-12) (05-14-12) (11-25-11) (05-14-12) (05-14-12) (05-11-12) (06-05-12)

Kansas City wheat futures
December contract, $ per bu
$10.50 $9.00 $7.50 $6.00 D M J
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Chicago wheat futures
December contract, $ per bu
$10.20 $8.60 $7.00 $5.40

Bulk middlings
$ per ton, delivered rail unless noted Spot Kansas City 205 @ 215 Southwest, f.o.b. truck 246 @ 250 Minneapolis 229 @ 239 Upper Midwest, f.o.b. truck 225 @ 235 Chicago West 242 @ 252 Central states, f.o.b truck 230 @ 240 Buffalo 200 @ 205 Southeast 195 @ 200 N. & S. California 227 @ 247 Los Angeles, f.o.b. truck 223 @ 243 Paciﬁc Northwest 240 @ 260 Upper Midwest, sacked 320 Wheat germ 290 @ 310 — Change from — Year Dec. Dec. 7 Nov. 30 ago 215@ 225 +5 @ +5 -5@ 0 200 @ 215 255@ 260 +5 @ 0 +10@ +10 225 @ 240 224@ 234 +10 @ +5 +5@ 0 184 @ 194 220@ 230 +10 @ +5 +5@ 0 180 @ 190 237@ 247 +10 @ +5 +5@ 0 197 @ 207 230@ 240 +3 @ +3 +8@ +8 190 @ 205 205@ 215 — +10@ +10 180 @ 190 190@ 200 — +5@ +5 175 @ 185 224@ 244 -10 @ -10 -8@ -8 189 @ 209 220@ 240 -10 @ -10 -8@ -8 185 @ 205 240@ 260 -5 @ -5 -5@ -5 195 @ 210 Jan. 188 @ 196 228 @ 233 216 @ 226 212 @ 222 229 @ 239 212 @ 220 175 @ 185 180 @ 190 216 @ 236 212 @ 232 240 @ 260 Jan.-Mar. 190@ 198 230@ 235 204@ 214 200@ 210 217@ 227 205@ 215 165@ 175 170@ 180 207@ 227 203@ 223 240@ 260
D M J
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W k' h Minneapolis ( t wheat

b ) futures
$10.75 $9.75 $8.75 $7.75 $6.75

December contract, $ per bu

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December 18, 2012

FOODBUSINESS NEWS

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Food Business News - December 18, 2012

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