Bookings of bakery flour continued to expand modestly last week. Price changes were mixed with pan bread flour and spring grades prices lower and soft flour prices higher.
Individual pan bread bakers added to their January-March flour coverage, while some cookie-cracker and specialty bakers booked soft flour through May.
Most of the week’s activity involved components instead of flat bookings. Some bread bakers and soft flour users covered the futures component of prospective flour bookings deep into 2010. Millers indicated bread bakers also were booking basis in Kansas City for the first and second quarters of 2010. There wasn’t much fresh interest in covering millfeed.
Indications were bread flour coverage for January-March was about 50%. Soft flour buyers had more extensive coverage. Cookie-cracker and specialty bakers typically book further forward than bread bakers. This was even more the case this year because of concerns about the supply of good quality soft wheat during the current year and a smaller area planted to soft wheat for harvest in 2010.
The U.S. Department of Agriculture on Dec. 20 lowered its forecast for food use of wheat in 2009-10 to 940 million bus from 955 million bus as the November projection. The latter number would have constituted record high usage of wheat for food. The current record food use of wheat was 950 million bus in 2000-01 followed by 948 million bus in 2007-08.
Southwest mills ran five to 5½ days last week with Upper Midwest units at five to six. Central states grind ranged from five to seven days. Northeast and Southeast mills ran close to five. West coast flour grind was six days.
Sales of national and regional brands of family flour picked up for a final push in shipments for the winter holidays. Carlot list prices were unchanged.
Product promotion turned more aggressive than was the case before Thanksgiving. In the Southeast, there were instances of family flour being offered at three 5-lb bags for $7 and even three 5-lb bags for $5. More common were promotions offering two 5-lb bags for $4. At one chain grocer, Gold Medal was offered as low as $1.68 per bag, and private label was priced at $1.25 per bag.
Shipments were expected to fall sharply after this week as the holidays approach.
It has been a good year for family flour manufacturers. The decades-long trend in the market was for steadily decreasing sales even in the face of a growing population as home baking declined in importance. It was expected 2009 would buck that trend by recording at least a small year-over-year increase.
Bookings of semolina, granulars and durum flour were limited last week. Price changes were minor.
The price of choice milling hard amber durum in Minneapolis was unchanged at $5.90 a bu. Quotes ranged from $5.75 up to $6.20, but there was no trading on the spot market to confirm a value. U.S. durum mills continued to operate comfortably on pipelines of wheat purchased weeks ago. The Canadian Wheat Board continued to offer milling durum at the equivalent of $6.25 a bu.
The U.S. Department of Agriculture on Dec. 10 lowered its forecast for the carryover of durum on June 1, 2010, by 7 million bus, to 40 million bus. The reduction was the result of higher domestic and foreign demand for U.S. durum. Domestic use of durum in the current crop year was projected at 84 million bus, up 2 million bus from the November forecast and up 3 million bus from 2008-09. Durum exports in 2009-10 were projected at 50 million bus, up 5 million from the November forecast and up 26 million bus from the previous year. Exports were projected to be the heaviest since 56 million bus in 2000-01.
Durum mill grind was around five days, off from the strong pace that prevailed since the beginning of the marketing year. Even with the recent slowdown, 2009 will be recorded as a buoyant year for the pasta industry.