SunPrairie Grain Morning Comment

MINOT - Nov 17/11 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.

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Opening Calls:

Wheat: 2-4 lower, export sales for the week were poor, where is the demand for this market? (Mpls March last trade 8.89, KC March 6.96 ½)

Soybeans: 3-5 lower, good export sales for the week but lower crude and a higher US dollar could push things lower (Jan last trade 11.84 ½)

Corn: 4-6 lower, strong export competition and slow demand for US corn (Dec last trade 6.37)

Sunflowers: 0-5 lower, following soybean oil, crude

Canola: 0-5 higher, futures rose early but could be pulled lower by US grain markets

*Victory Canola 2012-2013 Program*

The Victory Canola program for next year has been released! The contract comes with a 1,000 lb AOG and a 250 lb kicker AOG option on acres planted. We have three delivery windows each with their own pricing. Please call for more details or if you are interested in signing up for acres.

2013 Delivery Periods and Prices:

February - March: $25.10/cwt

April - May: $25.50/cwt

June - July: $25.90/cwt

*Prices are of yesterday's close, please call for current bids

Our HO sunflower program should be out by mid November. We should also have new crop NuSun bids available shortly as well. We have new crop cash bids for spring wheat and winter wheat available as well. New crop malting barley contracts are also available with an AOG.

Yesterday:

The US dollar was higher on continuing problems out of Europe pushing the Euro lower. Crude oil surged higher, though, and finished the day up over $3/barrel. Spring wheat managed to trade higher, somehow, finishing the day up eight cents putting prices solidly into the $9 range. Soybeans lost seven cents as we can't seem to push local prices above the $11 mark for long. Corn was down three cents and canola was off a dime. Flax and sunflower prices were unchanged for the day. Fund selling and concerns about the global economy worked to push things lower.

Today:

European debt concerns continue to push the Euro down to the lowest levels in five years. Ideas that the Euro debt crisis could be spreading and the impact on the global economy keeps these markets on edge. It doesn't help that a ratings service downgraded the rating for the US banking sector. Crude prices are about $1.50/barrel lower. Overnight trade saw corn down a nickel, beans off three cents and wheat down a few pennies. Dismal export sales for the corn and wheat markets won't help. Soybean export sales were pretty decent but may not be enough to support high prices today.

Estimations of the size of the European wheat crop continue to increase, the most recent number coming from a private French analyst. Australian wheat continues to provide competition into the Asian markets. Exports from Australia will likely pick up as harvest continues and movement is strong. US wheat export sales for the week were below expectations of 350-450 thousand metric MTat 317.1 TMT which only adds to demand concerns and verifies that export competition on the global market is tough. Winter wheat growing areas in the US are forecast to receive beneficial rains that could help out the crop but may add weight to this already seemingly heavy wheat market.

The soybean market is the only to really have some exciting fundamental news right now, at least from the demand side, and outside markets may burst the bubble and weigh things down. Export sales for the week were estimated to be between 500-700 TMT and sales came in at 746.1 TMT. Of course, most of this demand is from China and was already known to the market, but should be considered encouraging nonetheless. Also, ideas that Chinese imports for 2011-12 could increase in order to replenish state reserves should be considered favorable. Canola, flax and sunflower prices look to be fairly quiet today. We could see some downward pressure with the US dollar climbing and the crude oil market falling. However, sunflowers have been remaining steady and canola futures are higher so far this morning.

Corn export sales were extremely disappointing at 208.9 TMT, below expectations of 350-600 TMT. Global export competition for corn has been picking up as well. Also, a French analyst increased the size of the EU corn crop, which may add weight to the market. US basis has been firm lately, though, due to slow farmer selling and demand in the ethanol sector. Outside markets will continue to have a major influence on grain trade as we move forward in the coming weeks, especially during a seasonally quiet time for fundamental news.

As always you can reach me at Kayla.Burkhart

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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