SunPrairie Grain Morning Comment

MINOT - Jun 15/12 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.

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Morning Outlook as of 8:30 CDT:

Wheat: 3-5 lower, market breaks after yesterday's rally on the futures board (Mpls Sept last trade 7.51, KC Sept 6.61 ¾)

Soybeans: 2-4 higher, trying to come back after this week's sharp losses but gains are small, strong Chinese demand helps (July last trade 13.88 ½)

Corn: 1-3 higher, weather, funds, complete lack of fresh fundamental news

Sunflowers: 0-5 higher, bean oil working to recover after yesterday's sharply lower finish

Canola: 5-10 higher, stronger with the soybean complex, crude

*For those of you with AOG contracts (Flax, NuSun Sunflowers, HO Sunflowers, Victory Canola and Malt Barley) - we need land descriptions ASAP and FSA 578s by July 15th. For those of you with planted Victory Canola -remember that you can price an additional 250 lbs/acre with an AOG. Thank you!*

Yesterday:

It was overall a pretty dismal and confusing day in the markets. Corn really had no fresh news to drive prices higher. In fact - export sales for the week were terrible. However, somehow futures managed to muster up a higher trading day and corn finished the day nearly a dime higher. Soybeans, on the other hand, had incredible export sales which indicate that Chinese demand is going on strong. Despite the demand news, though, the soybean market fell off sharply and finished the day 22 cents lower for old crop cash prices. Fund liquidation hit the soybean market hard. Wheat futures were stronger yesterday with the Minneapolis July contract leading the way higher. Old crop cash prices of spring wheat fell, though, as bids rolled from the July futures contract to the September futures contract. Hard red winter wheat was up six cents for the day. Sunflower, canola and flax prices all turned sharply lower yesterday. The soybean oil market just got pummeled and we saw other oilseeds follow right on along.

Today:

Grain futures are pretty mixed this morning. A few minutes ago all wheat markets were lower and now Chicago and Kansas city have turned higher. Hopefully Minneapolis spring wheat futures can follow along and realize higher prices but after yesterday's price action that could be tough to do. Soybeans are up about four cents and corn is two pennies higher. The US dollar is lower this morning as there are hopes that the Fed will put into action a new idea to boost the US economy. Markets are nervous about the elections in Greece to take place this Sunday. There is a lack of fresh, fundamental news for these grain markets this morning. Prices are being driven by outside markets and weather forecasts and that's about it. Informa Economics, a private market analyst, will release its estimate of US acres this morning at 10:30.

The Chinese National Grain and Oilseed Information Center (CNGOIC) decreased its wheat production estimate. With decreased wheat production we will likely see increased wheat imports from China. This is encouraging news when combined with ideas that Russia, the EU, Australia and Argentina will all see decreased production and exports this year. Could the US wheat market gain increased market share in the global export market this year? Kansas saw some rain so winter wheat harvest is taking a pause in some areas but is overall continuing quite quickly.

Strong Chinese demand should be pushing soybean prices higher but the market is just struggling in the wake of strong fund selling. Additionally, Brazilian production estimates are all over the place and we could see more exports coming from South America. US production and carryout will also work to keep prices elevated. The market needs soybeans and there's uncertainty about US acres for now. Good domestic demand and strong crush numbers keep things supported as well. Canola, flax and sunflower prices look to recover a bit today with the soybean complex and marginally higher crude oil prices.

Corn is all about weather right now. The market is quiet in front of this weekend as rains are expected and Monday's price action will likely reflect how well ground was covered. Funds keep the market supported as the complete lack of export demand does not justify higher prices.

Have a great weekend!

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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