Milling & Baking News - December 20, 2005 - 41

I N G R E D I E N T

W E E K

 Wheat Futures

Wide price gains were scored in wheat
futures last week, in marked contrast
with the previous week, when steep
losses were sustained. The wheat market
has been volatile the past several weeks.
Chicago posted the most impressive
advances, especially through midweek.
There has been a massive speculative
short position in that market, estimated
between 100,000 and 120,000 contracts.
And commodity funds liquidating a
portion of their short positions provided
fuel to the price run-up there.
Providing support throughout the week
were concerns about possible winterkill or
damage to wheat across portions of the
winter wheat belt. Some analysts suggested recent bitter cold had damaged
3% to 4% of the U.S. hard red winter
crop. Only Texas among the hard winter
wheat states provided an update to its
winter wheat rating. The crop in that
state, which has been excessively dry in
recent months, was rated only 10% good
to excellent, 27% fair and 63% poor to very
poor. But Texas and Oklahoma, which also
has been very dry, were extreme cases.
Moisture was much better across Kansas,
Colorado and Nebraska. And veteran crop
observers cautioned about discounting the

potential of a mostly dormant crop.
A feature in midweek trading was response to a statement by Goldman Sachs
that indicated its belief wheat was trading
below value. The firm estimated current
"fair value" for U.S. wheat at $4.02 a bu.
Net sales of U.S. export wheat in the
week ended Dec. 8 totaled 712,700 tonnes,
up 65% from the previous week and 70%
above the prior four-week average. Sales
again were skewed in favor of hard winter wheat. Cuba indicated it would buy
500,000 tonnes of U.S. wheat in 2006.
Farmers have sold wheat in the last
few weeks, but poor railroad performance has slowed its entry into the cash
market. MBN

 Millfeed

Nearly the entire country experienced
the price impact of tight last-half December millfeed supply last week, with
prices surging another $10@18 a ton, except on the West coast. But the seasonal
run-up was based on very little traded
volume in most areas, prompting traders
to warn that prices could come down as
fast as they went up in just a few days.
Flour mill grind already began to back off
in most regions last week, either because of
slow flour sales, lack of rail cars or mechani-

Wheat futures

Kansas City wheat futures
March contract, $ per bu

$ per bu; change in cents per bu

Kansas City
March
May
July
September
Chicago
March
May
July
September
Minneapolis
March
May
July
September

Season's
Low

- Change from -
Dec. 9 Dec. 2

Week's
High
Low

Year
ago

High

3.67½
3.60
3.57
3.61

+9½c
+11c
+13c
+13¾c

-2¾c
+1c
+2c
+3c

3.69
3.63
3.59½
3.64½

3.54
3.48½
3.45¾
3.50

3.40½
3.30
3.26½
3.31

4.43
4.28
3.82
4.00

(05-03-04)
(04-07-04)
(07-12-04)
(06-03-04)

3.22
3.13
3.04½
3.12

(01-27-05)
(04-18-05)
(01-28-05)
(01-28-05)

3.19¾
3.28¾
3.38
3.46¼

+12¼c
+11¾c
+11¼c
+11¼c

-
-
+¾c
+¾c

3.26¾
3.35¾
3.45
3.52

3.10½
3.20
3.28½
3.38

3.04¼
3.11½
3.18¼
3.25½

4.41½
4.30
4.00
3.80

(04-05-04)
(04-08-04)
(05-04-04)
(03-15-05)

2.87
2.95
3.02¼
3.00¾

(02-04-05)
(01-31-05)
(02-04-05)
(05-04-05)

3.73¾
3.71
3.67¼
3.66¼

+7c
+6c
+6¼c
+6¼c

-1¼c
-2c
-2c
+1¾c

3.76½
3.74
3.70
3.70

3.66½
3.64
3.61
3.61

3.49¾
3.53
3.54¼
3.50

4.53
4.34
4.19
4.05

(03-29-04)
(06-01-04)
(05-05-04)
(06-24-04)

3.26
3.10½
3.18
3.25

(02-16-05)
(04-15-05)
(04-15-05)
(02-09-05)

Dec. 16

cal problems. The week-early reduction in
grind only added to the chronically short
supply situation in last-half December.
As the week proceeded, pricing became less structured and more unrealistic, with bids and offers up to $10 apart
within some regions and as much as $20
apart in others. The price variances reflected more flour mills' lack of millfeed
supply than actual demand. In some cases, flour mills sought millfeed to cover
their own previously sold orders.
West coast markets continued to be
the least affected by the upcoming holidays. Although nearby Pacific Northwest prices gained $3 a ton last week,
trading was nil, as most millfeed already
had been contracted. California markets
held firm, with ideas that downtime
would be minimal since Christmas and
New Year's Day fell on Sundays.
Wheat germ rose $10 a ton because of
tightening holiday supplies, although
there were indications of trades both
above and below the quoted price range.
Bulk middlings at $90 a ton in K.C. and
$66 in Minneapolis compared with corn at
$62.75 a ton and sorghum at $60.50 a ton,
both K.C. Corn gluten feed held at $53 a
ton, distillers' dried grain up $3, to $75,
and dehydrated alfalfa steady at $146. MBN

Chicago wheat futures
March contract, $ per bu

Bulk middlings
$ per ton, delivered rail unless noted
Spot
Kansas City
90 @ 94
Southwest, f.o.b. truck
100 @ 102
Minneapolis
66 @ 71
Upper Midwest, f.o.b. truck 62 @ 67
Chicago West
79 @ 84
Central states, f.o.b truck 76 @ 81
Buffalo
68 @ 75
Southeast
70 @ 76
N. & S. California
84 @ 90
Los Angeles, f.o.b. truck
80 @ 86
Pacific Northwest
90 @ 95
Upper Midwest, sacked
150
Wheat germ
300 @ 330

Dec.
90 @ 94
100@ 104
66 @ 71
62 @ 67
79 @ 84
76 @ 81
68 @ 75
70 @ 76
84 @ 90
80 @ 86
90 @ 95

- Change from -
Dec. 9
Dec. 2
+10 @ +10 +26 @ +26
+18 @ +18 +33 @ +33
+16 @ +12 +20 @ +21
+16 @ +12 +20 @ +21
+16 @ +12 +20 @ +21
+11 @ +11 +23 @ +23
+18 @ +17 +27 @ +30
+10 @ +9 +23 @ +22
0 @ +1 +1 @ +3
0 @ +1 +1 @ +3
+3 @ +3 +3 @ +3

42 / Milling & Baking News, December 20, 2005

Year
ago
65 @ 67
...
48 @ 54
44 @ 50
61 @ 67
58 @ 62
46 @ 50
45 @ 50
80 @ 86
76 @ 82
85 @ 90

Jan.
74 @ 78
79 @ 83
54 @ 60
50 @ 56
67 @ 73
57 @ 62
47 @ 54
53 @ 61
80 @ 86
76 @ 82
88 @ 92

Feb.
64 @ 66
67 @ 70
46 @ 50
42 @ 46
59 @ 63
43 @ 48
40 @ 47
43 @ 51
79 @ 85
75 @ 81
88 @ 92

Jan.-Mar.
64 @ 66
67 @ 70
47 @ 51
43 @ 47
60 @ 64
43 @ 48
40 @ 47
41 @ 49
79 @ 85
75 @ 81
88 @ 92

Minneapolis wheat futures
March contract, $ per bu

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Milling & Baking News - December 20, 2005

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