SunPrairie Grain Morning Comment
MINOT - Mar 12/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:55 AM CDT:
Wheat is down 2-4 cents, improvement to hard red winter wheat crop conditions, market needs demand news (Mpls May last trade 7.90 ½, KC May 7.31 ¼)
Soybeans are 11-13 cents lower, long term Chinese demand concern due to negative economic news, Argentine harvest approaches (May last trade 14.68)
Corn is 0-2 lower, taking cue from lower bean and wheat markets, ideas that southern US planting could get underway soon (May last trade 7.10)
Sunflowers are down 5-10 cents, bean oil is off with the soybean market this morning, pressuring oilseeds
Canola is 15-20 cents lower, selling pressure encouraged by lower soybean complex today
*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:
Grain futures started out the day mixed to lower but support was found fairly early in the session and we saw prices rally by the end of the day. Spring wheat and hard red winter wheat were both up two cents for the day. Corn and soybeans were up eight cents each while canola and sunflowers both gained a nickel. Corn found continued strength provided from Friday's USDA report. Soybeans were higher on last week's great export demand and messy Brazilian logistics. Canola and sunflowers played the role of followers and took cue from the rising soybean complex.
Today:
Outside markets are favorable to the grain markets this morning as crude is over a dollar/barrel higher and the US dollar is lower. Despite that, grain markets are struggling this morning and we're seeing mostly lower prices across the board. Wheat and corn prices were a bit higher to start this morning but it seems the losses in the soybean complex are enough to weigh things down. Soybeans are currently posting double digit losses as the market grows concerned about recent news regarding the Chinese economy. Wheat prices are following suit and corn has little else to do, so lower the market goes. US stock markets are slightly lower this morning.
Spring wheat basis crumbled a little on the spot floor yesterday. The spot floor is where loaded wheat cars are sold that were not previously contracted. The spot floor really helps us understand the current needs of buyers. If spot floor basis is high, it usually means end users really need product that can get to their location quickly. If spot floor bids are low, it typically means end users are more comfortable with their coverage and are not in dire need of immediate supply. Seeing bids take a fall yesterday in that area of the market, combined with the pickup in farmer selling seen over the past couple weeks, could be signaling to us that we are reaching or have reached our basis value highs. If you are thinking about locking in some nearby spring wheat basis you may want to think about doing so shortly. I'm not saying we're going to see things fall out from underneath us, but there are just a couple of warning signs up saying things could be relaxing a little.
Struggling wheat futures could have something to do with the improvement of hard red winter wheat crop conditions from the USDA yesterday. The western HRW crop remains dry but it seems that recent precipitation has provided relief to some areas and eased concerns about dry weather impacting the crop. Also weighing on things is the need for additional demand news. Export sales reported last week were pretty good, but we need that continue in order to keep prices supported. There is already some chatter about potential Canadian planting delays in Saskatchewan due to above average snowfall. Delays in that area could impact both spring wheat and canola crop prices. We have a while before planting, though, and a nice melt could ease wetness worries.
Soybeans are leading the way lower this morning as the market seems to be reacting pretty heavily to Chinese economic concerns. Additionally, I'm hearing reports that Chinese pork margins are low which could also negatively impact demand. Brazilian harvest progress is moving along quickly but it continues to be a headache to get the crop out of the country and into the marketplace. Argentine harvest is approaching rapidly which will also weigh on old crop soybean futures. It will be interesting to see if today's weakness can hold as today's session progresses. Sharply higher crude prices and a lower US dollar should be favorable factors to the soybean market today. Basis values for soybeans are also weakening a little as farmer selling has picked up.
Corn futures are now mixed, picking their way up after trading a little lower earlier this morning. Some support could be coming from frost potential to Southern Argentina and the impact that could have on the developing corn crop. Old crop prices could continue to struggle with a lack of demand and the beginning of South American harvest. There is chatter about planting starting up in the southern US now that things are drying out after recent precipitation. We'll likely be hearing more news about planting in the coming weeks. New crop prices will be keeping a watchful eye on US planting intentions as acres look to be at record high levels.
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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