Bookings of bakery flour were limited last week. Price changes were erratic from day to day, with pan bread flour and soft flour advancing while spring standard patent declined.
Specialty bread bakers and other buyers of spring grades seemed to be the most active flour buyers last week. While the recent rally in wheat futures prices discouraged flat pricing of flour, spring grade users covered both millfeed and basis components of prospective flour bookings for both the first and second quarters of 2010. In instances where bakers already had covered the futures component of flour bookings, the activity in millfeed and the cash basis completed some flour bookings for January-June.
Cookie-cracker and specialty bakers also booked millfeed and basis components of prospective flour bookings in some cases deep into 2010. In individual instances, component coverage extended into 2011. Soft flour users were concerned about the widespread quality problems in the 2009 crop supply and forecasts suggesting a steep decline in soft red winter wheat plantings for harvest in 2010.
Pan bread bakers weren’t enamored with the cash hard winter wheat basis, which has rallied in recent weeks, so their component activity was directed at millfeed, where deferred values have jumped recently with advancing corn prices. With regard to flour bookings themselves, most pan bread bakers concentrated
on filling gaps in December and January while holding off on adding significantly to their flour ownership in the first half of 2010. Pan bread flour coverage for January-March was estimated at around 50%.
Mill grind was heavy last week at six to seven days in the Southwest, Upper Midwest, California and the Pacific Northwest, at six days in the Southeast and at 5½ to six days in the Northeast and Central states.
Sales of national and regional brands of family flour were heavy with grocers and other outlets placing last-minute orders to supplement scheduled shipments to ensure shelves were well stocked for Thanksgiving bakers.
Product promotions turned aggressive. Some regional brands were offered by grocers at two 5-lb bags for $3, and White Lily brand was offered at $1.39 per 5-lb bag on some grocery chain shelves in efforts to encourage consumers to visit stores for their holiday food shopping as it was difficult to see how a price that low would cover the cost of the flour. Gold Medal flour was offered at $1.69 a bag in select Southeastern markets. The promotions seemed to be the most aggressive in the past few years.
The recent rally in wheat futures prices kept most buyers of private label flour on the sidelines. Many already had covered their needs through March or even June. Those who were yet to initial contracts for the first and second quarters of 2010 held back in the hope of lower wheat prices.
Bookings of semolina, granulars and durum flour were light last week. Prices declined with advancing millfeed values as the principal feature as the cash price of choice milling hard amber durum in Minneapolis remained at $5.80 a bu.
The cash durum market failed to receive a test in the past few weeks with most durum moving against contracts and virtually no activity in the spot market. The Canadian Wheat Board continued to offer milling durum held in store in Thunder Bay, Ont., at the equivalent of $6.15 a bu.
Some mills indicated a slowdown in orders from the frenetic pace that characterized the market for most of the year through October. It was suggested some pasta manufacturers may find themselves delaying some December semolina orders into January given recent heavy shipments.
Pasta makers weeks ago completed covering their December needs. Millers estimated 75% of prospective sales for January-March already was on the books, and April-June semolina coverage was estimated at around 40% of the potential.