Milling & Baking News - February 12, 2008 - 33

Data

programs for the current marketing
year, Mr. Hammond said. Still, none
of the major importing nations of
Asia - the Philippines, South Korea,
Japan and Taiwan - has yet covered
requirements for the summer, when
U.S. spring wheat supplies were expected to be desperately tight.
While Asian wheat buyers have
been inflexible with regard to buying spring wheat, there has been
some easing in rigidity with regard
to specifications, Mr. Hammond
said. Certain buyers that traditionally tender for 14.5%-protein hard
red spring wheat were considering
lowering protein specifications to
14%. Other quality compromises
may be required in the months
ahead, he said.
Asked whether tightness in U.S.
wheat supplies was becoming a

High-protein hard winter wheat
was trading at rapidly widening discounts to spring wheat of the same
protein. Bakers and millers were
working together to change formulations of products to accommodate
a higher percentage of hard winter
wheat compared with spring wheat
in blends, and some formulas calling for blends were being shifted to
hard winter wheat only. One miller
described the shift to hard winter
wheat from spring wheat as a "mad
rush."
At the same time, some baked
products - hearth bread, hard rolls,
bagels and other specialty items -
require flour milled from high-protein, high-gluten spring wheat. Bakers of these products had little or no
flexibility with regard to substituting
hard winter wheat for spring wheat.
Their pressing needs were reflected

greater concern abroad, Mr. Hammond said it was.
"I have three guys from a Japanese
television crew standing next to my
desk right now, and it's what they
want to talk to me about," he said.
"I don't know what happens next.
We're in uncharted territory."
Unprecedented prices also have
not adequately rationed domestic
demand for spring wheat even with
widespread substitution of high-protein hard red winter wheat for spring
wheat by mills across the country.

in the recent widening in the spread
between cash premiums on 14% protein spring wheat and 15% protein
spring wheat.
Supply of high-protein hard red
spring wheat was diminishing rapidly. U.S. hard red spring wheat production in 2007 totaled 449 million
bus, up 4% from 432 million bus in
2007. Both the 2007 and 2006 crops
had outstanding quality and were
graded No. 1 dark northern spring.
But only 43% of the 2007 crop had
protein of 15% or more, whereas 48%

Continued from Page 31

34 / February 12, 2008

Milling & Baking News

of the 2006 crop had 15% protein or
more. Stated in bushels, about 193
million bus of the 2007 crop had protein of 15% or more, while 207 million bus of the smaller 2006 crop had
protein of 15% or more.
Most spring wheat already was
in commercial hands. A Minneapolis grain merchant said a survey of
northern Plains elevators indicated
between 85% and 95% of the 2007
spring wheat crop in their territories
already was sold by producers. The
little wheat still owned by producers
might not move until the new crop
is planted and farmers have some
confidence in 2008 production prospects, the merchant said. So there
was no expectation farmer selling
would bring noticeable pressure on
the futures or cash markets in the
near term.
While mills have maintained nearterm pipelines in good order, offers
of spring wheat for April-July were
scant. It has been exceedingly difficult for mills to cover their summer
needs, the Minneapolis grain merchant said.
Erica Peterson, marketing specialist for the North Dakota Wheat Commission, said she doubted spring
supplies would be depleted before
new crop, but that applied to undifferentiated spring wheat. Spring
wheat supply with particular qualities and characteristics could indeed
run out.
Those looking to Canada for rescue were confounded by a Statistics
Canada estimate of Dec. 31 Canadian
wheat stocks that fell well below expectations. Statistics Canada on Feb.
5 estimated Canada's stocks of wheat
excluding durum at the end of 2007
at 12,278,000 tonnes, down 5,223,000
tonnes, or 30%, from 17,501,000 tonnes
a year earlier. The recent five-year average Dec. 31 stocks of wheat other
than durum was 15,053,000 tonnes.
Commercially held wheat stocks were
estimated at 3.1 million tonnes, down
14% from the end of 2006.
"There has been some wishful
thinking that the Canadians will bail
us out," Mr. Hammond said. "But the
Canadians haven't been selling, and
the Statistics Canada numbers explain
why - stocks are low there, too."
The U.S.D.A. on Feb. 8 projected
U.S. imports of Canadian spring
wheat in 2007-08 at about 37 million
bus, down from 50 million bus in
2006-07.
As if spring wheat users didn't
have enough to worry about, a new
bakingbusiness.com / world-grain.com

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