SunPrairie Grain Morning Comment
MINOT - Mar 7/13 - 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 4-10 higher, spring wheat leading the wheat markets higher, ideas that futures are oversold (Mpls May last trade 7.91 ¾, KC May last trade 7.29)
Soybeans are up 2-4 cents, new crop futures struggle a little but nearby commercial buying interest has old crop futures higher (May last trade 14.87)
Corn is 0-2 cents lower, buying interest seems to have settled down these past couple of days, prices slide (May last trade 6.88)
Sunflowers are 0-5 higher, bean oil is a little stronger this morning with soybeans being higher, could be good for sunflowers
Canola is 5-10 cents lower, futures struggling a bit, recent run up seems to be losing steam
*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:
The Dow set another all time high yesterday as investment interest continues to shift and everybody jumps on the stock bandwagon with the renewed steam the market has found. Corn saw a pretty heavy market sell off yesterday, citing lower wheat prices for the reasoning. However, wheat prices were not nearly as weak as corn which finished the day 21 cents lower. Helping out the wheat markets was a basis increase for both spring wheat and hard red winter wheat. Spring wheat saw cash prices down seven cents for the day and hard red winter wheat was down 16 cents. Soybeans were mixed for the day and cash prices ended unchanged. Beans wanted to trade higher but seemed limited by the losses in the corn and wheat markets. Canola was lower and sunflowers were higher.
Today:
Grains are mixed to mostly higher this morning and it looks like we may be headed for a higher day in general as we work our way through the morning. Currently, wheat is recovering some of yesterday's losses with spring wheat doing much better than hard red winter wheat. Soybeans are mixed with old crop contracts performing better than new crop, the opposite is true for the corn market. Outsides are seeing the US dollar sharply lower and crude prices about 75 cents/barrel higher. The US stock markets are performing better again this morning.
Wheat futures have some fundamental reason to trade higher today as export sales for the week were higher than expected. The market estimated export sales to be at 300-600 thousand metric MT(TMT) and sales came in at 828.1 TMT. It seems that prices worked their way low enough to spark up some demand. Also working for wheat prices is the idea that futures have been oversold recently and yesterday only added to that sentiment. So decent demand and short covering, combined with slow farmer selling, seem to be enough to keep prices somewhat supported for now. The market is well aware that there is abundant wheat supply on the farm, but seeing that not enough is moving to keep demand covered, basis values are doing quite well. When movement picks up basis values will inevitably relax.
Soybeans are seeing nearby contracts trading higher as commercial buying of old crop soybeans has been pretty strong this week. Tight old crop supplies should be enough to keep prices supported as we move forward. Export sales for the week saw some pretty hefty new crop sales which should also help to keep those prices from falling off too far. The market estimated sales to be at 700-1100 TMT and they came in above that at 1382.6 TMT. The market seems a little uncertain about the size of the Brazilian crop - new estimates are coming out that put it below current USDA estimates. Will the USDA also decrease its estimate? Bean oil is a bit higher this morning which should help to limit losses in the other oilseed markets.
Buying interest in corn futures seems to have quieted down pretty substantially and futures are at the mercy of wheat and soybean price action. With higher wheat markets today we are seeing corn prices trying to work their way higher, but having little success in doing so as prices are just above unchanged. Estimates of the Brazilian crop, coming out of Brazil, continue to remain higher than the current USDA estimates. It's hard to know who is right, though, considering that harvest has not yet really begun. Corn could struggle with news that South Korea passed on a purchase, saying prices were too high. Also, weekly ethanol production was lower this week than it was last week, but still decent indicating demand in that sector is still there. Export sales for the week were crumby at 156.6 TMT...with negative sales (cancellations) reported for old crop and new crop sales making it up. The market was expecting to see sales of 500-700 TMT, so the sales reported were pretty disappointing.
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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