Milling & Baking News - October 10, 2006 - 50

I N G R E D I E N T

W E E K

 Wheat Futures

Prices of wheat futures continued to
advance on the three exchanges. Chicago
was the leader, posting season and 10-year
highs at midweek and narrowing its discounts to Kansas City and Minneapolis.
The price spread between Chicago and
Kansas City December futures narrowed
to 38c a bu last week, from 65c at the beginning of September, 84c at the beginning of
August and 102c at the beginning of July.
High prices have rationed foreign demand
for hard red winter wheat. But soft red winter wheat, which is traded in Chicago, was
competitive with other world soft wheats,
and expanding foreign demand for U.S.
supply has pulled Chicago futures higher.
Supporting the run-up in futures
prices were purchases of U.S. wheat by
Egypt and Iraq and declining crop prospects in Australia, which was expected to
drive more world wheat buyers to seek
U.S. wheat at a time when U.S. stocks are
tight. Meanwhile, world wheat supply
in 2006-07 as measured against expected
usage was projected to be the tightest in
records extending back to 1960.
Given the tight U.S. and world supply
situations, commodity and other funds
were aggressive buyers of wheat contracts, catapulting prices higher.

Iraq bought 300,000 tonnes of U.S. hard
red winter wheat last week. Egypt bought
115,000 tonnes of U.S. soft red winter and
60,000 tonnes of Canadian soft red winter.
Export sales of U.S. wheat in the week
ended Sept. 28 totaled 377,800 tonnes, 8%
below both the previous week's number
and the recent four-week average.
Tempering buying enthusiasm somewhat was outstanding progress in seeding
the 2007 U.S. winter wheat crop. Producers
across the southern Plains were increasing
wheat acreage, and recent rains ensured the
crop would not have to be "dusted in."
Statistics Canada estimated 2006 Canadian wheat production at 26,289,100 tonnes,
down 2% from 2005 because of a huge drop
in durum production. Spring wheat production was estimated at 19,234,200 tonnes,
up 2% from a year ago. Winter wheat production was estimated at a record 3,516,900
tonnes, up 70%, from the 2005 outturn. MBN

 Millfeed

Additional sensational price advances
took place in millfeed. Southwest prices
were at the highest level since March,
Central states since January and the Upper Midwest since April 2004.
Once again, a major factor behind the
new gains was extraordinarily aggressive

Wheat futures

Kansas City wheat futures
December contract, $ per bu

$ per bu; change in cents per bu

Kansas City
December
March
May
July
Chicago
December
March
May
July
Minneapolis
December
March
May
July

demand for high-fiber ingredients. This
was because of a bailed hay shortage,
early creep feed and range cube demand.
Some buyers had utilized millfeed only
sparingly for years. In addition, south
central buyers have largely emptied the
Inter-mountain area of millfeed, in effect cutting off California and the Pacific
Northwest from outside supplies.
Complicating the situation for eastern
participants, integrated hog feeders in
North Carolina aggressively re-entered
the market.
Feed manufacturers frequently threatened to substitute other ingredients in
place of millfeed, but confirmed changes
to date were minimal. Some noted prices of competitive ingredients also have
moved higher.
Slower-than-expected flour grind also
contributed to the strong market. Many
mills ran only five to 5 ½ days at a time of
year when six days is the norm.
Wheat germ gained $10 a ton, up $15 in
the past two weeks. Supplies tightened.
Bulk middlings at $80 a ton in K.C. and
$74 in Minneapolis compared with corn
at $91 a ton and sorghum at $84 a ton,
K.C. Corn gluten feed was steady at $64
a ton; distillers' dried grain at $68 a ton,
and dehydrated alfalfa at $173 a ton. MBN

$5.50

Season's
Low

Oct. 6

- Change from -
Sept. 29 Sept. 22

Week's
High
Low

Year
ago

High

5.01¾
5.14
5.09
4.81

+5¾c
+11¾c
+9c
+2c

+20¼c
+24½c
+27c
+19¾c

5.21
5.27
5.21
5.02

4.86½
4.97
4.98½
4.76

3.76¾
3.79¼
3.78½
3.75

5.39
5.42
5.22
5.02

(07-11-06)
(07-11-06)
(07-11-06)
(10-04-06)

3.58
3.30
4.19
3.79

(09-07-05)
(02-09-05)
(02-06-06)
(01-10-06)

4.64
4.77½
4.74½
4.68½

+21c
+19½c
+14½c
+8½c

+45c
+45c
+30½c
+20½c

4.87
4.98
4.87
4.85

4.36
4.53
4.57
4.58½

3.38
3.52½
3.60
3.65¼

4.87
4.98
4.87
4.85

(10-05-06)
(10-05-06)
(10-05-06)
(10-04-06)

3.46
3.07
3.75
3.48

(12-09-05)
(12-09-05)
(01-18-06)
(08-16-05)

4.79¾
4.92
4.95
5.00½

+11c
+6½c
+8c
+5½c

+18¾c
+17c
+13c
+14¼c

4.94
5.06
5.09
5.10

4.65
4.78
4.85
4.86

3.79
3.82
3.83¾
3.85½

5.42
5.36
5.25
5.17

(07-11-06)
(07-11-06)
(07-11-06)
(07-11-06)

3.66
3.41½
3.82
4.01

(11-28-05)
(09-07-05)
(11-28-05)
(01-09-06)

$5.00
$4.50
$4.00
$3.50
$3.00
O

J

A
Previous Year

wheat
WChicago
k' h
(

J
Current Year

futures
b )

6¾

December contract, $ per bu

Bulk middlings
$ per ton, delivered rail unless noted
Spot
Kansas City
80 @ 83
Southwest, f.o.b. truck
86 @ 89
Minneapolis
74 @ 79
Upper Midwest, f.o.b. truck 70 @ 75
Chicago West
87 @ 92
Central states, f.o.b truck 65 @ 70
Buffalo
58 @ 63
Southeast
57 @ 60
N. & S. California
86 @ 96
Los Angeles, f.o.b. truck
82 @ 92
Pacific Northwest
95 @ 100
Upper Midwest, sacked
160
Wheat germ
185 @ 195

- Change from -
Oct.
Sept. 29 Sept. 22
80 @ 83
+7 @ +7 +10 @ +10
86 @ 89
+8 @ +8 +11 @ +11
71 @ 76
+2 @ +2 -3 @ -8
67 @ 72
+2 @ +2 -3 @ -8
84 @ 89
+2 @ +2 -3 @ -8
65 @ 70
+8 @ +8 +13 @ +13
57 @ 62 +12 @ +12 +18 @ +18
55 @ 60
+1 @ +2 +9 @ +9
86 @ 96
+1 @ +1 +2 @ +2
82 @ 92
+1 @ +1 +2 @ +2
95 @ 100 - @ - +15 @ +15

50 / Milling & Baking News, October 10, 2006

Year
ago
55 @ 58
63 @ 66
45 @ 49
41 @ 45
58 @ 62
35 @ 39
23 @ 28
30 @ 35
79 @ 83
75 @ 79
80 @ 85

Nov.
80 @ 83
86 @ 89
68 @ 73
64 @ 69
81 @ 86
68 @ 72
59 @ 64
61 @ 66
87 @ 97
83 @ 93
95 @ 100

Nov.-Dec.
81 @ 84
87 @ 90
70 @ 76
66 @ 72
83 @ 89
70 @ 73
60 @ 68
66 @ 71
89 @ 99
85 @ 95
95 @ 100

Jan.-Mar.
81 @ 85
87 @ 91
70 @ 76
66 @ 72
83 @ 89
65 @ 70
56 @ 66
63 @ 68
89 @ 99
85 @ 95
97 @ 102

Minneapolis wheat futures
December contract, $ per bu

bakingbusiness.com/world-grain.com
http://www.bakingbusiness.com/world-grain.com
Milling & Baking News - October 10, 2006

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