SunPrairie Grain Morning Comment
MINOT - Mar 28/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:25 AM CDT:
Wheat is 1-3 cents higher, markets fairly quiet in front of the USDA reports, futures continue yesterday's upward momentum (Mpls May last trade 8.14 ½, KC May 7.75 ½)
Soybeans are down 1-3 cents, choppy trade, export sales not the greatest, markets wait for other USDA news (May last trade 14.52 ¼)
Corn is 1-3 cents lower, as with wheat and soybeans the corn market is seeing choppy, pre-report trade (May last trade 7.33)
Sunflowers are 5-10 cents lower, bean oil is off this morning with the falling soybean market, direction will become clear after reports released
Canola is unchanged, futures board pretty quiet, seems to want to trade higher but a falling soybean complex seems enough to limit gains
*SunPrairie Grain will be closed tomorrow for the Good Friday holiday. There will not be a morning grain update.*
Yesterday:
The grain markets staged a little bit of a rally in front of the pair of USDA reports to be released today. Spring wheat cash prices were lower, though, as there was a 10 cent drop in basis values that erased the gains on the futures side of things. Wheat futures were the leader of the day, though, and hard red winter wheat prices were up a nickel. Corn futures were lower to start but finished the day higher, following stronger soybean and wheat prices. Soybeans were up six cents for the day as hopes for demand had prices higher. It seems that slow South American logistics are keeping the soybean market hopeful about strong demand. Canola futures posted pretty solid gains yesterday which worked to push cash prices up another 30 cents/cwt.
Today:
Outside markets are favorable for higher price action in the grain futures today. The US dollar is a little bit lower and crude prices are up nearly 15 cents/barrel at the moment. Grain futures are choppy, though, as we are in sit and wait mode for the 11 AM release of the long anticipated USDA Quarterly Stocks and Planting Intentions reports. Export sales were good for wheat, ok for soybeans and alright for corn. Export sales don't seem to matter much today, though, as attention is elsewhere. The market has a pretty good indication of where things are going to be reported today but the USDA always likes to surprise us so who knows exactly what we're in store for today. Corn and soybean stocks numbers will be watched closely.
Spring wheat basis values fell off a dime yesterday. This is not really a surprise considering all of the wheat that has been sold over the past couple of weeks. The market has always known that there is plenty of wheat available...it's just that none of it really wanted to move over the winter. A lack of selling kept basis values strong and got us to levels not seen in awhile. Once the selling broke loose, though, end users started getting their needs covered and now values are starting to relax. Have we found the top of our basis values for the time being? For those who are looking to sell wheat in the next month, but think futures still have some strength potential, give us a call about a basis contract. Wheat futures focus today is going to be with the USDA. The market is expecting to see all wheat acres at 56.41 million with "other spring" coming in at 12.45 million. Stocks are estimated to be at 1.177 billion bushels, compared to last year's March 1st stocks of 1.199 billbu. Export sales for the week were pretty good, indicating that we're still seeing some pretty good demand. Sales came in at 828.6 thousand metric MT(old and new crop) and estimates ranged from 300-600 TMT, that could be part of the reason for support to wheat futures this morning.
Producer selling of soybeans has reportedly picked up over the past couple of weeks, which was needed as the pipeline supplies were reportedly getting a bit tight. Basis values have been holding fairly steadily after dropping off a bit a couple months ago. There are ideas that South American demand will continue to shift to the US as logistics in Brazil and Argentina remain fairly messy. Export sales for the week were in line with estimates that ranged from 500-800 TMT and came in at 674.1 TMT. March 1st stocks are expected to come in at around 935 million bushels with estimates showing a range from 912 millbu - 1.059 billbu. Acres are estimated to be at 78.3 million, up from baseline estimates.
The corn market has been bouncing around in overnight trade and for the moment is mostly lower. New crop prices are hurting a bit more than old crop, which are finding support from tight supply concerns. The past two years have seen major market moves with the release of the March 1st stocks data, will this year be the 3rd? Stocks are estimated to be at 5.013 billion bushels, with estimates ranging from 4.8-5.2 billbu. Acres will be watched as well, with the market expecting to see 97.3 million reported but estimates ranging from 95.7-98.5 million. On the global front, Argentina has approved additional corn exports. There are already reports of Argentine corn coming to US feed lots, will that continue with additional exports? US export sales for the week were fine, at least they were in the positive, instead of showing net cancellations. Sales came in at 314 TMT, in line with estimates that ranged from 200-400 TMT.
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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