SunPrairie Grain Morning Comment
MINOT - Apr 2/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:35 AM CDT:
Wheat is up 7-10 cents, worries about planting weather for spring wheat, market rebounds as recent losses have been heavy (Mpls May last trade 7.76 ½, KC May 7.16 ¾)
Soybeans are 10-13 cents higher, market needs some sort of recovery, hopes for increased Chinese demand (May last trade 14.03 ½)
Corn is up 5-9 cents, apparently nearly a dollar's worth of losses in two sessions is enough, buying interest sparks higher prices (May last trade 6.50 ½)
Sunflowers are 0-5 higher, bean oil prices are fairly quiet this morning, falling crude could limit gains, looks to be quiet for oilseeds today
Canola is up 10-15 cents, market recovers some after yesterday's losses on the futures board
Yesterday:
Follow through from Thursday's bearish USDA stocks numbers had the grain markets on edge for a second session in a row. Corn was leading the way lower with expanded trading limits of 60 cents, which were utilized on the old crop contracts. Corn cash prices were down 50 cents by the end of yesterday's session as strong selling pressure continued to just hammer prices lower. The bearish stocks report also contributed to weakness in soybean prices in yesterday's session. Soybeans lost another 14 cents/bushel by the end of the day, taking some cue from falling corn prices as well. Wheat followed corn and again saw double digit losses. Spring wheat saw basis values recover a little with the drop in futures prices which helped to ease some of yesterday's losses, but cash prices were down a dime still. Hard red winter wheat saw prices fall off 17 cents for the day.
Today:
It looks like we're seeing a "Turnaround Tuesday" in the grain markets today. Most futures contracts are posting pretty decent gains, with some posting double digit gains. It seems the recent sell off has spurred some buying interest and profit taking, which is pushing prices higher today. Also helping is weather concerns as our focus shifts from stocks numbers to weather and planting delays/crop development issues. Outside markets are unfavorable for the grains today with a higher US dollar and lower crude prices, but it doesn't seem to matter much to the grains in today's session.
US hard red winter wheat crop conditions continue to be poorly rated. Yesterday's weekly crop conditions report had the crop rated at 34% good to excellent, which is reportedly the third lowest rating since 1986. Poor crop conditions could be supporting HRW prices. However, there is precipitation in the forecast over the next 10 days which could limit gains. The spring wheat selling that we saw pickup over the last few weeks has slammed to a close so far this week as drastically lower prices have growers waiting for a rebound. The shut off in selling came at the perfect time as basis values were really getting top heavy and seemingly about to break. Now that selling has slowed, and if it continues to stay that way, we could see basis values stick at current levels for the time being. Spring wheat futures are likely finding some support from cold weather and planting delays. South Dakota planting is behind due to dry weather and ND planting is well behind as much of the state is still covered in snow. It's too early to panic, but when in a weather market these are the things that matter.
Soybeans are higher today just to recover a bit after recent losses. As I mentioned above, soybeans are hoping that Chinese demand will pick up this spring as domestic stocks are reportedly getting a little bit tight. Brazilian harvest is nearly three quarters of the way done and logistics remain messy. South American supply will continue to compete with US soybeans in the export market well into the US harvest. Some major price forecasters have decreased their soybean price estimates for old crop and new crop. Canola futures are rallying pretty well today as it seems that futures buying interest has picked up after the recent price declines.
The corn market seems to have mostly digested the increase in the March 1 stocks estimate as buying interest has come back to the futures side of things. There are also indications that demand could be picking up as South Korea is out looking for corn. Focus will now start to turn to US planting progress. States such as Louisiana and Texas have done pretty well for planting. However, other states are not doing so well as cold and wet weather are limiting progress. Soil temperatures are just too cold for germination in areas and the early planting effort is being inhibited. Again, it's early, but with a weather market the market will over analyze this type of news.
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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