Krispy Kreme Doughnuts Inc., based in Winston-Salem, North Carolina, bought more wheat in the past month, Chief Executive Officer James H. Morgan Jr. told analysts on a call Aug. 29. Prices were better than the company expected and “we don’t see any factors that have us very alarmed” about agricultural commodity costs in the next several quarters, he said. Shares of Krispy Kreme almost doubled this year in New York.
R. Steve Kinsey, the chief financial officer of Flowers Foods in Thomasville, Georgia, said on a call with analysts Aug. 13 that the company anticipates lower commodity costs in the second half of this year. Flowers bought the Wonder bread brand in July from bankrupt Hostess Brands LLC. The company will report a 78 percent gain in net income to $241.7 million this year, according to the mean of six analyst estimates.
China, the biggest wheat consumer, may import 9.5 million tons this season, the most in 18 years, the USDA estimates. The country already booked 3.76 million tons from the U.S., 10 times more than a year earlier. Prices for bread-quality wheat reached a record last month in China after rain and flooding in some provinces in May and June reduced yields and crop quality.
Egypt, historically the biggest wheat buyer, may import 9 million tons this season, 8.4 percent more than a year earlier, the USDA estimates. The state-run General Authority for Supply Commodities purchased 1.97 million tons abroad since the start of July, 58 percent more than a year earlier. The military ousted President Mohamed Mursi in July, about a year after he was elected following the overthrow of his predecessor Hosni Mubarak in 2011.
Brazil bought 2.06 million tons of U.S. wheat since June 1, USDA data show. Production in Parana, the biggest growing area, may be 1.98 million tons, 27 percent less than a previous estimate, after frost damaged crops, the government estimates. Argentina, normally the largest supplier to Brazil, slowed shipments after greater-than-average rainfall and heat cut its harvest last season, Trade Ministry data show.
“We could see some excitement on the tender front heading toward the end of the year,” said Kieran Walsh, a broker of agriculturalderivatives at Aurel BCG in Paris. “Egypt had a bit of catching up to do, given they were out of the market with the civil unrest. There are some concerns about China and Brazil in terms of their domestic crops.”
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