Bookings of bakery flour were light during the holiday-shortened week. Prices advanced in response to an early-week surge in wheat futures markets.
Holiday doldrums prevailed. Most bakers and other flour buyers much earlier booked what flour supply they needed to sustain operations well into the new year. Flour sales executives indicated business was limited to spot fill-ins. Even inquiry for contract extensions was lacking on most days.
Bakers approached the new year with excellent pipelines. Coverage for January was solid. For the January-March quarter, coverage in the markets for pan bread flour and spring grades was estimated at around 70%. Flour coverage held by cookie-cracker and specialty bakers varied with some covered through March and even beyond while others had ownership about equal to that held by the bread bakers. Millers encouraged soft flour users to keep contract balances well extended because of prospective tightness in quality supply during the remainder of the current marketing year and projected smaller soft red winter wheat and soft white winter wheat outturns in 2010.
Very little component activity was discussed let alone completed because of the holiday break.
Flour grind last week increased from the levels seen over Christmas week but still were light because of the New Year’s holiday. Mills averaged about 4½ days in the Southwest, five in the Upper Midwest and four in the Central states. Grind in the Northeast average just
under four days with the Southeast at four. West coast mills ran four to five days.
Sales of national and regional brands of family flour continued to slow last week. Carlot list prices were unchanged.
With home baking for the winter holidays concluded, the market for family flour was expected to revert to the routine. The next occasion for an upturn in family flour demand will be Easter.
It was expected once data become available manufacturers will receive confirmation 2009 was a good year for family flour sales with year-over-year growth in many, if not most, months. This would be a wonderful achievement in a market that for decades typically saw year-to-year declines in volume.
Family flour was marketed more aggressively in 2009 than during the past few years. The lower price of wheat compared with a couple of years ago gave manufacturers and grocers greater leeway to conduct trade activation initiatives.
Manufacturers’ packaging lines operated only around three days last week because of the holiday. January typically is a month of slow operations.
Bookings of semolina, granulars and durum flour were lacking during the holiday-shortened week. Prices declined 10c a cwt.
The price of choice milling hard amber durum in Minneapolis declined 5c, to $5.85 a bu. Recent trading was minimal but at levels that suggested a slightly softer tone to the market. Mill pipelines were in good order as the new year approached. Mill grind was down to around four days because of the holiday break. Mill operations were expected to pick up to about five or six days this week.
The Canadian Wheat Board offered milling durum held in storage in Thunder Bay. Ont., at the equivalent of $6.20 a bu, down 5c from the previous week.
Pasta manufacturers earlier covered virtually all of their prospective semolina needs through March and extended contract balances into April-June. There was no reason to interrupt holiday observances to put on additional coverage.
While semolina shipments slowed in November and December from the earlier brisk pace, 2009 as a whole was an exceptionally good year for the pasta industry. It often is the case that sales of pasta and other food staples increase during difficult economic times as consumers give greater consideration to price and value in food selections. That certainly was the case for pasta in the past year.
With only slow improvement in the overall economy and employment expected in the next year, consumers may continue to turn to pasta and other value foods in coming months.