SunPrairie Grain Morning Comment

MINOT - Aug 29/12 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.

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Market Outlook as of 8:35 AM CDT:

Wheat: 7-9 higher, global demand picks up, gets wheat futures excited - rising European wheat futures help also (Mpls Dec last trade 9.30 ½, KC Dec 9.02 ¾)

Soybeans: 10-12 higher, news of sales to southeast Asia help to spur buying interest (Nov last trade 17.33)

Corn: 4-6 higher, fund buying after five consecutive days of losses (Dec last trade 7.99 ½)

Sunflowers: 0-5 higher, bean oil is stronger with soybeans this morning but falling crude prices could limit gains

Canola: 15-20 higher, futures rally with soybean complex and after sharply lower close yesterday

Yesterday:

Corn closed lower for the fifth day in a row as the market continued to focus on demand instead of supply concerns. Corn finished the day a nickel lower and weakness spilled over to wheat futures. Spring wheat finished the day down a couple cents while hard red winter wheat was off a nickel. Rains to HRW growing areas, relieving some worries about dry soil for seeding, may have also been a reason for lower prices in yesterday's session. Soybeans did well yesterday, though, after seeing a lot of mixed, two sided trade throughout the session and finished the day four whole cents higher. Sunflowers were up 20 cents but flax and canola relaxed a bit, both showing double digit losses for the day.

Today:

Grain markets are higher this morning and it is looking like we might see a day of decent gains after several days of uneventful trade. Currently, spring wheat is up about eight cents and hard red winter wheat is up nine. Some fresh demand news has worked its way into the wheat market and has futures a little bit excited this morning. Soybeans also saw some encouraging demand news and we're seeing gains of about a dime so far this morning. Corn is along for the ride, supported by stronger wheat and soybean prices and ideas that closing lower for five consecutive trading sessions was enough for now. Our outside markets are unfavorable as the US dollar is higher and crude prices are about 40 cents/barrel lower this morning.

Wheat buyers have reportedly perked up out of the Middle East, Africa and Southeast Asia. While Egypt bought Russian wheat - the US is hoping to get some export business done with Southeast Asia and wheat futures are supported by the optimism. Additionally, European futures are stronger today due to concerns about Russian production and how that will impact exports. Spring wheat basis is sticking at current values for now. Movement remains strong, export demand is quiet at the moment and mills are in good supply.

The soybean market remains pretty excited about demand as the market shows little rationing of tight supplies. It seems buyers are willing to pay high prices to get the product they need. A sale to China announced yesterday is encouraging. Also helpful is further reports of sales to southeast Asia. A privately conducted survey of farmers showed that soybean acres are expected to increase next year - I'm sure that strong futures prices have something to do with that. However, November 2013 soybean futures are about four dollars less than November 2012 soybean futures. Canola futures are recovering this morning after a strong sell off into yesterday's close.

The corn market is finally seeing some buying interest start up after closing lower five days in a row. However, it looks like prices are weakening at the moment as our gains are well off the overnight highs. The market has turned its attention from tight supply and drought news to actual harvest yield results. It seems the general consensus is that yields are better than expected. If so, that means we may have seen the high in the corn futures market. However, it seems that December futures are pretty comfortable in the $8 range for now. The private survey that estimated more soybean acres is predicting corn acres to drop to 93.1 million this year. It's a bit early to know how acres are going to go this year but it's always interesting to hear what everybody has to say.

All in all, it's looking like another quiet day in the grain markets.

Kayla Burkhart

Broker/Procurement

SunPrairie Grain

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1600 27th St SE | Minot, ND 58701

P 701.857.9322 | F 701.839.5515 | C 701.720.4682

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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