Milling & Baking News - March 16, 2004 - 64

I N G R E D I E N T

W E E K

Bakery Flour
Bookings of bakery flour expanded.
Prices declined.
Declining wheat futures prices encouraged a broad expansion in bakery flour
booking. Most of the week's business
comprised filling in of gaps in March coverage and adding to April ownership. But
increasingly, some bakers were willing to
look further forward, extending contract
balances into May-June. There remained
reluctance to book new crop flour. But in
individual instances, coverage was taken
through September or even December.
Pan bread bakers were active. There
was a lot of business done for April.
There was less reluctance to putting on
ownership in May-June. By the week's
end, it was estimated that about 40% of
April-June needs had been covered.
Some millers reported even greater activity among hearth bread bakers and
other spring grades users. One hearth
bread baker covered its needs through
December. Distributors and other users
of sacked flour continued to buy what
was required to keep contract balances
extended from 30 to 60 days.
Cookie-cracker and specialty bakers
also booked April-June. But activity in
this market was less intense, with most
soft flour users coming into the week

Carlot Bakery Flour Prices

holding more extensive coverage than
the bread bakers.
While flour output appeared to pick
up slightly at some points, production
levels were only slightly improved from
the week before. Southwest grind averaged just a shade better than five, Northwest five to 5½. Central states mills also
came in at five to 5½, Buffalo and adjacent
eastern areas four to five. Southeast grind
was close to five. California and the Pacific Northwest average was six days. MBN

Wheat Futures
Wheat prices on the three exchanges of
Chicago, Kansas City and Minneapolis
sustained further losses last week, even
with a Friday advance. Chicago Board of
Trade May wheat traded down to fivemonth lows. Kansas City May wheat
traded at the lowest levels since December. A few cents lower for that contract,
and K.C. wheat also would have been
trading at the lowest levels since October.
In the absence of additional China
wheat buying and with Egypt purchasing 120,000 tonnes of Australian wheat
versus 55,000 tonnes of U.S. hard winter,
there was nothing in the market to halt
the price decline. Weather and soil moisture has improved across the southern
Plains, even if that improvement has yet
to be translated into a better crop rating in

Bakers Standard Patent, Kansas City

Bulk, f.o.b. car, $ per cwt

March 12

March 5

Year
ago

Kansas City
Bakers standard patent

10.60

10.70

10.20

Minneapolis
Spring standard patent
High gluten

10.80
13.05

11.20
13.45

10.90
12.40

Chicago
Cracker

10.85

11.05

9.90

Spring Standard, Minneapolis

Cracker Flour, Chicago

Bulk, f.o.b. car, $ per cwt

Kansas. The hard winter crop was emerging from dormancy as far north as
Concordia, Kas., and was greening up
well across central areas of the belt.
March supply/demand data failed to
increase the U.S. wheat export projection
for 2003-04 or the import projection for
China. This resulted in a negative response, price-wise, to the revised projections. The U.S.D.A. projected the U.S.
2004 wheat carryover at 544 million bus,
up 10 million from February and up 53
million bus, or 11%, from 491 million bus
on June 1, 2003. The increase resulted directly from a 10-million-bu decrease in
the food use projection, to 900 million
bus, which was attributed to better-thanexpected flour extraction rates and
which, if realized, would be the smallest
food use since 1996-97. U.S. wheat exports were projected unchanged from
February, at 1,150 million bus.
The Foreign Agricultural Service decreased its estimate of 2003-04 world
wheat production by 3.71 million tonnes,
to 548.06 million tonnes. India's crop was
reduced 4.2 million tonnes, to 65.1 million. But the decrease was not expected to
increase that country's import needs, currently forecast at just 50,000 tonnes. In fact,
the F.A.S. increased its forecast for 200304 Indian wheat exports to 4.5 million
tonnes from 4 million. The Australian crop
was raised 500,000 tonnes, to 25 million.
The spread between corn and wheat
futures prices narrowed last week to the
point that wheat was being fed at individual locations and was close to being
fed across several regions. The spread
between the Kansas May wheat future
and the Chicago Board of Trade May corn
future narrowed to 67¾c at the end of
trading Thursday compared with 80½c
the preceding week. The Chicago May
wheat/corn spread narrowed to 62¼c a
bu from 76½c the week before.
U.S. export wheat sales in the week
ended March 4 totaled 617,200 tonnes,
with 589,900 tonnes of that total for old
crop. The results were above the range of
trade pre-report estimates. MBN

Cash Wheat
HARD WINTER. Premiums on hard red
winter and dark hard wheat in Kansas City
were unchanged to 3c a bu higher. Lowest proteins were unchanged. At the same
time, they found firm underlying support
from advancing bids from exporters at the
Gulf, who, in instances, bought spot wheat
at levels well over their posted bids because supply already purchased was delayed in shipment, leaving them short of
wheat to stem waiting vessels.
High-protein wheat showed a little further strength following impressive gains
in the previous few weeks. High-protein

64 / Milling & Baking News, March 16, 2004

bakingbusiness.com / world-grain.com

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Milling & Baking News - March 16, 2004

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