Bookings of bakery flour expanded last week. Price changes were mixed with pan bread flour and soft flour lower but spring grades higher.
Flat price booking was limited, but there was considerable activity in components with the aim of assembling finished contracts for the first quarter of 2010 before the holidays. In several instances, bakers with futures coverage for prospective flour bookings through March booked basis and/or millfeed to complete the transactions. This was especially noted among pan bread bakers and cookie-cracker and specialty bakers. As the week drew to a close, one miller suggested the component activity pushed overall pan bread flour coverage for the first quarter up to 60% to 70% compared with 50% a week earlier.
Soft flour coverage was more extensive with some buyers willing to push contract balances deep into 2010 because of concerns over the supply of high-quality soft red winter wheat in view of the widespread incidence of vomitoxin in the 2009 crop and firm indications area planted to soft wheat this year for harvest in 2010 will be much lower than last.
Continued volatility in the cash spring wheat market kept millers, specialty bread bakers and other users of spring grades off balance and the market more difficult to define than those of the other grades. To avoid some of this instability and out of consideration for the low average protein of the 2009 spring wheat crop, several specialty bread bakers and other users adopted formulas allowing for slightly lower protein in the flour.
Mill grind was five to 5½ days in the Southwest, six to seven in the Upper Midwest, five to six in the Central states, four to five in the Northeast, five in the Southeast and five to six on the West coast.
Sales of national and regional brands of family flour slowed seasonally. Carlot list prices were unchanged.
With last-minute shipments for Christmas week largely completed, packaging lines trimmed production schedules to about four days from the six-day pace that prevailed during the previous several weeks. Typically, family flour sales revert to serving routine demand during the winter and don’t show much increase until home baking becomes more active around Easter.
Pre-holiday product promotions proved to be more aggressive than in recent years with even national brands offered in some markets at around $1.50 per 5-lb bag.
Indications were demand for family flour continued to show growth from the previous couple of years. Market data for the 12 weeks ended Nov. 28 showed unit volume for the category up 5.8% from the same span a year ago, and sales for the 52 weeks ended Nov. 28 were up 2.8% from a year earlier. The results were outstanding in a market that perenially sees year-to-year declines in volume.
Private label flour showed the greatest increases in volume for both the 12 and 52 weeks. Private label flour sales were up 7.2% in the 12 weeks ended Nov. 28 and were up 9.1% in the 52 weeks ended the same date.
Bookings of semolina, granulars and durum flours were limited last week. Price changes were narrow.
The price of choice milling hard amber durum in Minneapolis was $5.90 a bu with quotes ranging from $5.75 to $6.05. Mills continued to sustain operations by means of pipelines conveying durum already purchased and under contract. Trading on the spot market was negligible, which accounted for the range of quotes.
Price stability in the market for cash durum translated into a semolina market lacking drama. Pasta manufacturers’ semolina needs were solidly covered through March, and April-June coverage was estimated at around 50%.
Durum mill grind was about six days last week in anticipation of curtailed operations during both Christmas and New Year’s weeks. Shipments slowed from the strong pace that prevailed during the past several months.