Food Business News - December 18, 2012 - 52

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

Soy Products
The price of soy flour declined last week despite gains in soybean meal futures prices, most likely because of a downward adjustment in the cash soybean meal basis. Despite some customers taking unexpected downtime before the holidays, demand remained robust. Buyers were looking for January-March coverage. Bookings remained about two to three weeks forward. Domestic soybean demand remained strong. The National Oilseed Processors Association said 157.3 million bus of soybeans were crushed in November, within market expectations and close to the record November crush of 160.3 million bus in 2009. There were ideas that recent heavy soybean crush may temporarily decline, which may tighten soybean oil and meal supplies. The U.S. Department of Agriculture in its Dec. 11 World Agricultural Supply and Demand Estimates projected the carryover of U.S. soybeans on Sept. 1, 2013, at 130 million bus, down 10 million bus from its November forecast and down 23% from 169 million bus in 2012. The U.S.D.A. 2013 soybean carryover was below the average of trade estimates that was near 135 million bus. The projected 2012-13 U.S. soybean crush was raised 10 million bus from November to 1,570 million bus, but still was down 8% from 1,703 million bus in 2011-12. Total use was projected at 3,031 million bus, up 10 million bus from November, reflecting the increased crush projection, but down 17 million bus from 2011-12. U.S. soybean futures benefited from an ongoing supportive outlook for exports. After the U.S.D.A. reported strong weekly soybean export sales on Thursday, futures prices advanced for the third consecutive session and hit a high for the week. There was little

evidence that prices had reached a level where they would ration demand, and a strong cash market was viewed as further evidence of continued overseas buying enthusiasm. The U.S.D.A. said net export sales of U.S. soybeans in the week ended Dec. 6 were 1,319,400 tonnes, a high for marketing year 2012-13 and well above analysts’ expectations of 550,000 tonnes to 900,000 tonnes. The sales were up 16% from the previous week. FBN

Corn Products
Prices of most corn products were softer as old-crop corn futures tumbled on disappointing export data. Hominy feed prices were about steady, with normal seasonal demand. Corn futures declined. Early in the week, market participants were still reacting to the prior week’s dismal weekly export sales report from the U.S. Department of Agriculture. Although net export sales of corn in the week ended Dec. 6 of 258,900 tonnes for 2012-13 were within the range of analysts’ expectations, they followed very weak export numbers from a week earlier and still were 10% below the four-week average. The current data did little to alter the pattern of lackluster demand, which was gaining traction with reports of rapidly declining corn premiums at the Gulf. The amount of corn inspected for export for the marketing year through Dec. 6 was only 50% of the amount inspected at the same time last year. Corn exports were expected to remain at disappointing levels until the spring. The U.S.D.A.’s World Agricultural Supply and Demand Estimates released Dec. 11 added to the bearish corn outlook by projecting an increase in global corn production of 9.4 million tonnes, with Chinese corn output hitting a record in

2012. Also bearish were modest declines in domestic ethanol production. The U.S. corn carryover on Sept. 1, 2013, was projected at 647 million bus, unchanged from November but down 341 million bus, or about 35%, from 988 million bus in 2012, the U.S.D.A. said. The U.S.D.A. 2013 corn carryover number was below the average of trade expectations of 666 million bus. All 2012-13 U.S. corn projections were unchanged from November except average price, which was lowered to $6.80@8 a bu from $6.95@8.25 a bu and compared with $6.22 a bu in 2011-12. Despite the increase in world corn production, concern about a tight supply situation because of the drought-ravaged U.S. crop underpinned the market and has kept a floor under prices. FBN

Oats
Food-grade oats flakes prices were seasonally strong as cold weather maintained demand for hot breakfast cereal. Oats futures prices were volatile. The U.S.D.A. in its Dec. 11 WASDE narrowed its projected 2012-13 average oats price to $3.55@4.05 a bu. The WASDE also reflected small reductions in Canadian and Australian oats crops; Canada is the lead nation in the production of food-quality oats. FBN

Rice
Prices of U.S. milled rice were unchanged last week, the U.S.D.A. said. Rice byproduct prices were steady to lower. World milled rice prices posted by the U.S.D.A. were unchanged last week. Net export sales of U.S. rice in the week ended Dec. 6 were 114,100 tonnes, up 21% from a week earlier, 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 — Change from — Year Dec. 14 Dec. 7 Nov. 30 ago 7.18¾ 7.30¾ 7.33¾ 7.30¼ 6.49½ 6.28 $ per bu 14.96 14.91½ 14.71½ 14.53 14.18¼ 13.65¼ $ per ton 460.10 457.70 453.60 440.70 429.90 416.50 -14 -6½ -5½ -5¼ -8¼ -9¾ +23¾ +19½ +18¼ +11½ +4¼ -5¾ +9.60 +14.80 +15.70 +14.40 +10.80 +6.80 -29¼ -22 -18¼ -14 -7¼ -7½ +57¼ +59 +61¾ +52½ +42 +27 +17.70 +22.80 +26.10 +26.70 +22.10 +17.20

Soy products
Defatted, f.o.b. Midwest plant, $ per cwt — Change from — Dec.14 Dec. 7 Nov. 30 5.83 Soy ﬂour 33.74 @ 35.00 -.13@ -.11 +.27 @ +.30 5.91¾ Bulk 35.74 @ 36.00 -.13@ -.11 +.27 @ +.30 5.98½ Sacked 5.69¼ Corn meal 5.48 5.60¼ $ per cwt — Change from — Dec. 14 Dec. 7 Nov. 30 11.30 25.85@ 30.59 -.11@-.13 -.41@-.45 11.39½ Chicago, bulk 11.50¼ Chicago, sacked 27.62@ 32.68 -.11@-.13 -.41@-.45 27.52@ 32.58 -.11@-.13 -.41@-.45 11.59¾ New York, bulk 11.58 New York, sacked 29.94@ 34.99 -.11@-.13 -.41@-.45 11.53 290.30 293.50 297.00 300.90 302.10 302.40

Rice

offers f.o.b. mills, $ per cwt, bagged — Change from — Year Cash Dec. 14 Dec. 7 Nov. 30 ago Long grain 26.75@28 — — 27 Medium grain 27.50@28.50 — — 31 Parboiled 29.25@33 — — 30 Second heads, bulk 19.50@20 — — 17 Brewers 17@17.50 — — 14 f.o.b. mills, $ per ton Rice millfeed 85@85 — — … Rice bran 195@215 -5 +10 220 Rice hulls 25@35 -10 -10 70 U.S.D.A. 2012 crop world price milled - $ per cwt Long grain 19.35 — -0.40 21.54 Medium/short Oats 19.07 — -0.40 21.25 — Change from — grain 13.69 — -0.29 15.24 Minneapolis Dec. 14 Dec. 7 Nov. 30 Broken C.B.O.T. rough rice futures - $ per cwt Food grade ﬂakes, f.o.b., January 15.42 +0.15½ +0.15 13.69 bagged, $ per cwt 31.50@31.75 — +.25 March 15.72 +0.14 +0.13½ 13.94 Milling quality oats, No. 2 heavy, May 16.05 +0.14 +0.18 14.23 $ per bu 4.09¾ +-1½c +11c July 16.22 +0.15½ +0.19 14.50 Oat hulls, $ per ton 25@35 — —

FOODBUSINESS NEWS

December 18, 2012

Food Business News - December 18, 2012

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