SunPrairie Grain Morning Comment
MINOT - Mar 1/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market outlook as of 8:30 AM CDT:
Wheat is down a penny to six cents, spring wheat showing strength over other wheat markets, profit taking after recent run up seems culprit (Mpls May last trade 8.01 ¼, KC May 7.46 ½)
Soybeans are 13-15 cents lower, Argentina is forecast to get some rain, providing short term relief to dry areas (May last trade 14.38 ¼)
Corn is down 3-5 cents, with soybeans, little else to guide prices today (may last trade 6.99 ¾)
Sunflowers are 5-10 cents lower, bean oil and crude are off this morning, sunflowers go too
Canola is down 20-25 cents, what beans do canola does also, today that is not working out so well for us as futures relax
*CHS Harvest for Hunger*
Today marks of the beginning the annual CHS Harvest for Hunger campaign! The CHS Country Operations locations are working together to raise over two million meals for hungry families. Best of all is that for every donation we collect, CHS Country Operations will also make a local contribution to help our friends and neighbors right here in our community. If you would like to make a contribution to Harvest for Hunger you can do so by selling grain or making a cash donation at your local SunPrairie Grain office by March 20th. Let's work together to make this the most successful Harvest for Hunger yet!
*Delayed Price Program*
SunPrairie Grain is offering free DP until July 31st, 2013 on spring wheat and winter wheat delivered by March 15th. All new deliveries of corn and soybeans can be put on DP for 5 cents/bushel/month. Sunflower new deliveries can also be put on delayed for 15 cents/cwt/month.
Yesterday:
We saw grain prices perform fairly well yesterday, wheat prices were well supported by additional basis increases. Spring wheat saw a 10 cent basis increase and a 5 cent futures increase, pushing cash prices up 15 cents and closer to that $7.50 mark. Hard red winter wheat saw basis increase by a nickel and futures by a dime and also increased by 15 cents on the cash price, flirting with the seven dollar mark for cash prices. Yesterday's rally seemed led mostly by short covering more than anything as there was not really a fresh fundamental reason for higher prices. Soybeans saw strong export sales reported yesterday which worked to push futures up 13 cents/bushel. Corn followed along with export sales being better than we've seen recently but nothing amazing and cash prices finished the day eight cents higher. Canola was up a dime but sunflower and flax prices both lost ground as bean oil could not sustain gains.
Today:
Outside markets are unfavorable with a higher US dollar and sharply lower crude prices this morning. Grain markets are lower, likely ending the week in a way we don't really want to see. Soybeans are leading things down, showing double digit losses of about 15 cents/bushel. Corn is about four cents lower, taking cue from the falling soybean complex. Spring wheat is holding strength relative to the other wheat markets, down only two cents compared to hard red winter wheat's losses of about seven cents.
The International Grains Council (IGC) has increased its global wheat stocks estimate by about four percent, which could be working to weigh on futures just a little bit this morning. I'm also hearing some reports that Ukraine could begin to export again in April, which would make it difficult for the US to get additional Black Sea or Northern African wheat business. China is also reportedly planning on selling wheat from some of its state reserves in order to help ease domestic prices. Today's prices action seems to be a result of profit taking after the recent run up in prices. Considering what we've gained, I don't think losing a penny or two is too terrible. Basis values are steadily on the rise as nearby wheat is needed. Railroad placements are behind and wheat selling is slow, forcing end users to ramp up their bids a bit. This is good for you, the farmer, as it keeps prices supported. However, once wheat starts moving we will see those basis values fall off a bit, it is only a matter of when.
The soybean market heard of additional new crop sales to China, which reportedly happened last night. However, the market does not seem to care much, judging from today's price action. Demand for US soybeans looks to continue at a pretty good pace since South American logistics are a mess. Ship loading wait times at Brazilian ports are, I'm hearing, seeing 50-60 day wait times. If those wait times do not work for buyers they will have no choice but to look for soybean supply elsewhere, and we can bet that much of that business will come to the US. Today's price action can be credited to forecasts for rain to dry areas of Argentina. Short term relief to dry areas is to be seen today and tomorrow, which is pressuring prices today a little. Soybean oil and canola futures are off with the soybean futures, pulling cash canola, flax and sunflower prices lower today as well. Birdfood sunflower demand seems to have been scared off recently but crush demand is picking up a bit, maybe providing us some good pricing opportunities. Look for sunflower prices to be at the mercy of the soybean complex and demand swings.
There is really little to report for corn today. South Korea is reportedly looking for cheaper corn sources, so we could see export business to that country slow down a bit. Today prices are at the mercy of the soybean market. The big looming thing for corn prices continues to be the acreage potential in the US and world as it seems everybody wants to plant corn.
Have a great weekend!
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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