SunPrairie Grain Morning Comment

MINOT - Nov 12/10 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.

Sorry it's late today - we had some email issues at the office!

Opening Calls:

Wheat: 7-12 lower, rain hits winter wheat areas and broad based selling

hits the markets

Beans: 30-35 lower, economic news out of China

Corn: 10-12 lower, follower, selling pressure hitting the market

Yesterday:

Was a fairly uneventful day for the markets. Corn was pretty much

unchanged and wheat trade was two sided and finally succumbing to lower

prices at the end of the day. Soybeans and soybean oil found a lot of

strength during the session and gains in the oil markets were pretty

decent. Sunflowers found forty cents, flax a nickel. Canola was lower

due to a higher dollar. Canola futures did not trade yesterday but

adjustments for a higher US dollar were made.

Today:

Today is looking very, very ugly. Talk that China will work to prevent

inflation by raising interest rates is hammering the soybean complex

this morning on the Chicago Board of Trade and corn and wheat markets

are following suit. Markets are essentially overreacting to the news and

commodities as well as the dollar are getting pummeled. One good thing

to note, though, is that the commodities finished the overnight trading

session well off of their lows of the evening. Crude oil is down 1.43 a

barrel at 86.38, off lows of 85.51. I think things will be pretty ugly

at the opening but hopefully we'll recover a bit once things move along.

Wheat exports were actually pretty decent for the week - coming in at

832 TMT with estimates at 350-500 TMT. Will this help ease concerns

about reaching USDA export estimate goals? It's only one week so we

don't want to get ahead of ourselves but being ahead of market

expectations is never a bad thing when it comes to export sales. Wheat

is being pressured lower by much needed rains falling across the winter

wheat growing areas. However, the areas that needed it most (in Kansas

and Colorado) may not get what is needed to ease concerns. A falling US

dollar will hopefully provide support but who knows how heavy selling

pressure could be.

Soybean export sales for the week were pretty lackluster, especially

when compared to weeks past. Sales were 809 TMT versus estimates of 950

TMT-1.25 MMT. Soybeans are overreacting the worst to recent economic

news out of China, considering that China is responsible for most of the

US soybean demand. A private market analyst released their estimates

yesterday for US 2011-12 soybean acres. They decreased them to 75.8

million acres, anticipating a big switch to corn acres.

Corn export sales weren't too exciting either, but were above

expectations. Sales came in at 573 TMT with estimates at 400-500 TMT.

Informa estimates US corn acres to be an enormous 93.1 million. If that

turns out to be the case, what do you think might happen to corn prices?

Short and sweet today - looks to be pretty ugly, at least to start.

Get out and enjoy the weather - nothing good can come from watching

these markets today!

As always you can reach me at Kayla.Hoffman

To discuss this report further or for specific trade ideas please contact me

directly

Kayla Hoffman

SunPrairie Grain

Kayla.Hoffman@chsinc.com

Toll free: 800.735.4956

Local: 701.852.1429

Fax: 701.839.5515

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