Flour Facts

August 29, 2024

Weekly Market Highlights

• The USDA’s crop ratings this week show 69% of the spring wheat crop good-excellent. That is down 4% from last week and 3% below analyst expectations. Harvest is now 51% complete, which is 20% more than last week, 3% above expectations, 1% above last year, and 2% behind the five-year average.
• Wheat export inspections moved moderately higher to reach 19.7 million bushels last week. That was also on the very high end of analyst estimates, which ranged between 11.0 million and 22.0 million bushels. South Korea was the top destination, with 3.5 million bushels. Cumulative sales for the 2024/25 marketing year are still running moderately ahead of last year’s pace after reaching 189.1 million bushels.
• Wheat production in Canada could rise 4.3% above 2023’s volume to 1.263 billion bushels, according to the latest survey findings from Statistics Canada.

The impact of millfeed

    Have you ever looked in the Wall Street Journal and seen the futures price of wheat falling but the price of flour remains the same or even rises? Part of the reason can be falling millfeed pricing. When we mill wheat, we utilize the entire wheat kernel, less than 80% is flour but the remaining portion is sold as animal food. This animal food, or millfeed as we call it, competes with other feed ingredients such as corn. If corn prices are low (almost half of all corn grown is used as animal feed), millfeed prices will also be low. That "credit" that we get by selling the millfeed will not be as great thus forcing the price on the flour to go up. Conversely, if corn, or other feed ingredients are higher priced we get a better millfeed recovery, which offsets more of the price of the wheat thus lowering flour prices.

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