Milling & Baking News - March 26, 2019 - 46

Organics Update

Organic wheat prices remain
strong to start the year
KANSAS CITY - Prices for organic
food-grade hard red winter wheat
in January-February advanced from
the prior two-month period and
were well above the year-ago level,
while corn prices edged higher and
soybean prices declined, according
to Mercaris, the organic and nonG.M.O. trading platform and market
information company.
Hard red winter wheat averaged
$14.21 per bu in the January-February

up $2.60 from a year ago, Mercaris
data showed.
"Organic corn contract prices continue to hold a substantial premium
over 2018," Mr. Koory said. "Over
January-February, the delivered organic food-grade corn price averaged
$12.41 per bu, up $2.60 per bu from
a year ago. This is in stark contrast
to organic feed-grade corn, which
has seen prices trend below yearago levels since the start of 2019. So

about even with the year-ago price.
Soybeans averaged $20.40 per bu in
the latest period, down $1.51 from
November-December, down $1.18
from September-October and down
3c from a year earlier.
"Organic soybean prices have been
stuck at a discount to last year's level
since the start of the 2018-19 marketing year," Mr. Koory said. "However,
with the beginning of 2019 and the
end to marketing of the fall crop, foodgrade organic soybean prices have
been on the rise and nearly closed the
gap with 2018 in February. Thus far,
March is on track to see food-grade

Organic food-grade grain prices
National average price based on
eight-week rolling average
Jan.-Feb.
NA
$14.21
NA
NA
$12.41
$20.40

- Change from -
Nov.-Dec. Sept.-Oct. Year ago
NA
NA
NA
+1.59
+4.29
$10.87
NA
NA
NA
NA
NA
$18.27
+0.15
+2.15
$9.81
-1.51
-1.18
$20.43

©KIRAHOFFMANN - STOCK.ADOBE.COM

in $ per bu
Hard red spring
Hard red winter
Soft red winter
Durum
Corn
Soybeans
Source: Mercaris

period, up $1.59 from NovemberDecember, up $4.29 from SeptemberOctober and up $3.34 from a year ago,
according to Mercaris.
"Organic hard red winter wheat
continues to pull ahead of last year's
prices," said Ryan Koory, senior
economist at Mercaris. "The 201819 winter wheat crop protein levels
were anecdotally lower than the prior
year, which has likely been the factor
supporting prices over the past year.
However, with spring approaching,
and with it the harvesting of winter
wheat, it is likely the market will
see prices break before the end of
May. How much prices will break is
largely dependent on the quality of
a crop that has yet to make it out of
the field."
Prices for food-grade, organic
hard red spring wheat, soft red winter wheat and durum remained unquoted as they have been for the past
several months due to slow market
activity.
Food-grade organic corn averaged
$12.41 per bu in January-February,
up 15c from November-December, up
$2.15 from September-October and
46 / March 26, 2019

Milling & Baking News

far, the 2018-19 marketing year has
seen feed-grade organic corn imports
move steadily higher, likely weighing
down feed-grade prices. However, the
cause of the price rally seen in foodgrade is a bit harder to single out.
"Overall, U.S. organic corn production growth slowed in 2018, likely
tightening the U.S. supply of foodgrade organic corn. Adding to this,
unlike feed-grade corn, food-grade
organic corn is sourced almost entirely
from domestic producers. As a result,
any increase in organic corn imports
is likely to have a muted impact on
prices. Unless a significant quantity
of food-grade organic corn remains
unspoken for in grain silos across the
United States, it is unlikely food-grade
prices will face any bearish pressure
over the next few months.
"However, if the flow of U.S. organic corn imports significantly tightens,
then we could see more bullish pressure enter the market as U.S. organic
livestock operations go shopping for
more domestic supplies."
Organic food-grade soybean prices
in January-February declined from
the prior two-month period and were

soybean prices punch well above last
year's level, with some trades closing
near the $24-per-bu level.
"It is not uncommon for soybean
prices to find bullish support as winter
comes to an end. However, the magnitude and pace of the market's climb
is a bit surprising. In general, U.S. organic soybean supplies appear robust,
despite the recent decline in organic
soybean imports. Given what appears
to be tenuous support for prices, it
appears the bullish market that has
developed may have a difficult time
persisting through the spring."
Kellee James, founder and chief executive officer of Mercaris, will make
a presentation on the state of the organic market at the 2019 Sosland Publishing Company's annual Purchasing Seminar June 9-11 in Chicago.
Mercaris is a comprehensive source
of market data and online trading for
feed-grade and food-grade organic and
non-G.M.O. commodities based in Silver
Spring, Md. For more information visit
www.mercaris.com. Sosland Publishing
Company publishes this food-grade organic grain price report in the second issue
of Milling & Baking News each month. MBN
bakingbusiness.com / world-grain.com

http://STOCK.ADOBE.COM http://www.mercaris.com http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - March 26, 2019

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