SunPrairie Grain Morning Comment
MINOT - Apr 11/13 - 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 2-5 cents higher, cold temps to US hard red winter wheat growing areas, recovery after yesterday's selloff (Mpls May last trade 7.87 ¼, KC May 7.35)
Soybeans are down 1-3 cents, renewed pressure with Chinese demand concerns despite nearby supply tightness (May last trade 13.94 ¼)
Corn has old crop 5-8 cents higher and new crop a penny higher, US planting intentions keep a lid on new crop prices (May last trade 6.57)
Sunflowers are 5-10 cents lower, bean oil is lower this morning with falling crude and soybeans
Canola is unchanged, futures slightly higher this morning and may show some strength despite weaker soybeans
*Delayed Price Program*
SunPrairie Grain is offering free DP until July 31st, 2013 on spring wheat and winter wheat delivered by April 30th. 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. DP availability is subject to space limitations at any given location.
Yesterday:
The grain markets saw some initial strength after the release of the monthly USDA S&D report, but that strength faded for the wheat and soybean markets as selling took over. Wheat stocks were reported at 731 million bushels, which is what the trade anticipated but is still considered a bullish number. Global wheat stocks were increased as well. Spring wheat finished the day 11 cents lower and hard red winter wheat was down 16 cents for the day. The soybean market expected to see US ending stocks increase due to the higher stocks number reported on March 28th. However, the USDA left ending stocks unchanged which should have been favorable. The market was also hoping for reduction in the South American crop estimates but those were left unchanged as well. Soybeans were down three cents for the day. Corn ending stocks were expected to be increased pretty substantially to 824 million bushels from 632 millbu estimated in March. However, the USDA put ending stocks at 757 millbu and corn was happy with that. Corn was up a nickel for the day.
Today:
Grain markets are mostly higher this morning as it seems much of yesterday's selling has subsided for the time being. The US dollar is lower which could be providing some support but crude prices are off about 45 cents/barrel at the moment. Old crop soybeans have now worked their way higher but the new crop board is still seeing some pressure. Our grain markets are now steadily focused on weather reports and planting/crop development conditions. Export sales for the week were pretty uneventful and it seems that we're done with yesterday's USDA report news. There is little happening with fresh news in the grain markets this morning.
Cold temperatures to US hard red winter wheat growing areas are generating a lot of concern about the condition of the HRW crop in areas. The cold weather has settled into many major growing areas and could last over the next couple of days or so. From a global perspective there is quite a bit of news around. First off, Brazil has increased its wheat import quota and many in the marketplace believe that Brazil will be coming to the US for supplies. Then there's the mess in Egypt. Egyptian wheat stocks are getting pretty tight, but when finances are tight it's hard to find people to business with you. So for now Egypt is in a bit of a conundrum. Asian buyers seem to have more interest in buying wheat with the recent drop in prices as it seems news in that department has picked up. However, our weekly export sales report does not confirm that news as sales for the week were pretty uneventful at 339.5 thousand metric MT(TMT). The market was estimating for sales between 300-600 TMT and it's always a bit disappointing when we see those sales reported at the low end of estimates.
Soybeans are mixed right now with old crop futures higher on the tight supply situation and new crop futures lower with demand concerns. Export sales for the week were a nonevent but most purchases were old crop with hardly any being reported for new crop. Sales came in at 383.7 TMT, well below estimates of 500-800 TMT. South American production estimates were expected to be cut by the USDA yesterday, but that failed to happen and I think that could be negatively impacting things as well. Also, this whole Chinese bird flu dilemma remains a demand concern as well. Canola and sunflowers will continue to look to the soybean complex for direction as there is little fresh demand news to drive prices otherwise at the moment. Flax prices remain strong with high offers out of Canada and the crush needing supply, farmer movement in that department has picked up a little with the price spike but is still slow overall.
Old crop corn prices are gaining more over new crop futures. New crop is struggling with high production potential in the US this year. Sure, we're getting a late (cold and wet) start to the planting season in the US but the market isn't concerned yet. We're still pretty confident that we're going to have a major corn crop in the US this year. However, the trade seems to be taking note daily of the unfavorable weather across much of the major US growing areas. There is also talk of cold weather to Chinese growing areas which may be keeping new crop prices a bit supported, though. India has been selling corn and wheat in the global marketplace, getting rid of some of its bumper crop and making room for this year's harvest. India is in all likelihood taking up some of our Asian demand. Even with more competition, though, export sales for corn beat out the wheat and soybean numbers. The market estimated sales at 250-500 TMT and they came in at the high end of that at 476 TMT.
It looks to be a fairly quiet day for the grain markets as we seem to have digested the new information that the USDA gave us yesterday and there is little other fresh news to trade off of.
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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