Bookings of bakery flour were limited last week. Price changes were narrow.
Bakers concentrated on filling gaps in January-March flour coverage before leaving offices for the holidays. Bakers with futures coverage covered the basis and millfeed components to complete flour transactions through March, and bakers lacking futures coverage locked in that component also with the aim of completing contracts. There also was flat pricing for the first quarter, but with coverage already at about 65% completed, last week’s activity nudged ownership to about 70% in the case of pan bread flour. Coverage for the quarter was similar in the market for spring grades and a shade more extensive in the case of soft flour.
Individual cookie-cracker and specialty bakers covered the wheat futures component of flour bookings as far forward as December 2010, but most held to the sidelines.
Bread bakers’ inquiry for April-June coverage was minimal with last week’s principal goal being to ensure flour pipelines were adequate to sustain operations into the new year.
The Commodity Credit Corp. seeks offers Jan. 6 on 12,880 tonnes (284,048 cwts) of all-purpose flour in 50-kg bags for donation Pakistan (11,880 tonnes) and Colombia (1,000 tonnes); shipment was schedule for Feb. 1-March 15.
Flour grind was reduced during the holiday week. Mills in nearly all regions ran from three to four days, depending on whether they came back on the weekend after Christmas. Many stayed down the entire weekend. There were exceptions, with one mill in the Southwest running through Christmas but one in the Central states down all week.
Sales of national and regional brands of family flour steadily slowed with grocers’ shelves already stocked for home bakers seeking flour for Christmas baking. Carlot list prices were unchanged.
Packaging lines operated about three days, and the traditional seasonal ebb in operations loomed. After the holidays, demand will revert to the routine. Often, grocers work down inventories left from the holiday period, further depressing post-holiday buying.
Some grocers ran promotions Christmas week. Among the more aggressive were in the Southeast, with both Pillsbury and Martha White offered on shelves of some supermarkets at two 5-lb bags for $3. Promotions this autumn were heavier than during the previous couple of key home baking seasons.
Private label manufacturers indicated there were few buyers interested in extending coverage during the holiday week. Most buyers were comfortably covered through the first quarter of 2010.
Ideas were family flour volume this holiday season would be even with or a shade stronger than last year, which was considered a strong showing in a market typically seeing a year-to-year decline in unit sales.
Bookings of semolina, granulars and durum flour were light last week. Price changes were narrow.
The price of choice milling hard amber durum in Minneapolis held at $5.90 a bu with quotes ranging from $5.75 to $6.05 and no trades to provide the market greater definition. The Canadian Wheat Board continued to offer milling durum held in storage in Thunder Bay, Ont., at the equivalent of $6.25 a bu.
A carry in the cash durum market and a discount in forward millfeed prices combined with holiday schedules to keep contracting interest at a minimum. Pasta manufacturers earlier booked nearly all of their prospective semolina needs through the first quarter of 2010, and April-June coverage was estimated at about 50%. With coverage so extensive and 2009-10 durum supplies in both the United States and Canada ample, pasta makers felt little pressure to extend contract balances.
Durum mill grind was curtailed because of downtime around Christmas.
Indications were Turkey sold 50,000 tonnes of milling durum last week to Mediterranean destinations. During the previous couple of years, drought reduced Turkish wheat production so it was largely absent from the export market.