SunPrairie Grain Morning Comment
MINOT - Mar 6/13 - 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 3-6 cents, US plains weather has been favorable and precipitation is forecast to continue (Mpls May last trade 7.92 ¼, KC May 7.39)
Soybeans are 1-3 cents lower, despite good demand news soybeans take a breather for the day and work their way lower (May last trade 14.65)
Corn is down 3-5 cents, lack of fresh news and thin volume lets prices fall (May last trade 7.04 ½)
Sunflowers are 0-5 cents higher, bean oil is marginally higher at the moment but I don't expect that to continue, looks to be a quiet day for sunflower prices
Canola is down 0-5 cents, market fairly quiet there as well, falling soybean complex and crude prices could pressure futures but other than that it's a nonevent day
*CHS Harvest for Hunger*
We are in the midst of the annual CHS Harvest for Hunger campaign! 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:
Turned out to be an okay day for the grain markets as we had mostly higher futures price action. It seemed that soybeans were leading the way as reports of sales to unknown and China were around and that was enough to get soybeans excited, however prices finished off their highs of the day and were up only four cents by the close. Corn futures found support from rising soybean prices and slow farmer selling as there isn't much fresh news for corn to trade off of on its own. Prices finished off better for corn than soybeans though as cash prices were up six cents for the day. Spring wheat was up three cents and hard red winter wheat was up seven cents. Wheat prices struggled to trade higher but managed to do so anyway which is encouraging. Canola prices were higher and sunflower prices were a nickel lower, flax was unchanged. The Dow hit all time highs yesterday.
Today:
It looks like grains are going to relax a little bit this morning. US stock markets look to continue their recent rally as investors work their way back into the stock markets. The Dow looks to climb higher again this morning and the S&P may surpass its record highs as well. The US dollar is higher and crude prices are about 30 cents/barrel lower at the moment. The USDA will release its monthly S&D report on Friday and the market is already looking forward to what might get said. Grains are mostly lower this morning with bean oil, canola and oats trying to stick it out with higher prices. Soybeans, corn and all three wheat markets are not faring so well so far today.
Wheat futures are having a tough time with the recent and forecast precipitation to the US plains. Another system is expected to move through Colorado, Kansas and Nebraska which may hit some of the areas that have been missed by recent storms. European futures are falling on improving US and Russian weather, which in turn works to keep US wheat futures in check as well. There are also indications that global supply may be increasing and export competition may be picking up. We already know India is to export more and chatter about Ukraine lifting its export ban continues. Ukraine may export in order to make some room for new crop supplies which would only make it tougher for US wheat to get additional export business. For now, though, local basis values are looking good as it seems that demand is fairly steady. Once movement picks up we could see basis crumble a little and I'm thinking that increase in movement will happen after planting is complete.
The soybean market has heard lots of sales announcements recently and those are what worked to keep prices supported in yesterday's session. Old crop and new crop sales were announced yesterday as buyers come to the US for timely old crop supply. Brazilian logistics remain fairly slow and ship loading wait times continue to be reported at 50+ days. Some encouraging news is that we could see reductions in Brazilian crop estimates - however the estimates out of Brazil now are getting closer to what the USDA is currently estimating. Unfavorable growing weather which impacted yield is the reason being cited for production decreases. Increasing global vegetable oil supplies could keep pressure on the palm and bean oil markets, but today that does not seem to be an issue as bean oil is slightly higher.
Sunflower crush demand has picked up a little bit, while birdfood demand is simultaneously diminishing. With winter being about over I don't see any reason for birdfood demand to pick up drastically any time soon. The buyers in that market have switched to an "all or nothing" sort of mentality - wanting all the sunflowers they can get their hands on or nothing really at all. Crush demand has been steady all winter and just recently picking up, hopefully indicating that oil sales are on the rise. Prices have little fundamental news to trade off of so they have been at the mercy of an erratic soybean market.
A lack of fresh news combined with thin volume is letting corn futures drift a little lower this morning. Currently futures are down about six cents/bushel. Export demand remains pretty weak so it doesn't even matter if there isn't much competition for sales out there...if there's nobody buying it doesn't much matter if there are not many sellers out there right now. Also unfavorable for the corn market is more competitive wheat prices, meaning that wheat is working its way back into the feed mix and potentially pushing corn away. Corn will continue to look to soybeans for direction until it can really find some fundamental news of its own.
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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