SunPrairie Grain Morning Comment
MINOT - Apr 12/13 - 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 up 4-7 cents, buying spurred by strength in corn and soybeans, some help comes from questionable HRW conditions (Mpls May last trade 7.96, KC May 7.46)
Soybeans are 4-6 cents higher, strong commercial demand keeps the market supported (May last trade 14.08 ½)
Corn is up 4-6 cents, speculative buying continues to pull futures higher, producer selling is slow which helps keep prices boosted as well with supplies being tight (May last trade 6.56 ¼)
Sunflowers are 0-5 lower, bean oil is off a little this morning, crude is sharply lower but soybeans are higher, so it could be a quiet day in that market
Canola is 5-10 cents higher with stronger soybeans, ignoring the falling crude market
*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:
An overall lack of producer selling seemed to be enough to keep the grain markets supported yesterday. Some help may have come from tight US old crop supplies in the corn and soybean markets as reported by the USDA on Wednesday. Overall it was a pretty good finish to the day with soybeans up a dime and corn up two cents. Canola was up 20 cents/cwt and flax was up another 30 cents, as right now flax is the market that just does not want to quit trading higher. Sunflowers were a little weaker yesterday, down a dime for the day. Wheat prices followed the strength in the corn and soybean markets yesterday. Some support was also found from frost damage concerns to the US hard red winter wheat crop. Spring wheat finished the day up a nickel and hard red winter wheat was up eight cents for the day.
Today:
Grain markets are mostly higher this morning, with the exception of soybean oil which seems to be falling off with crude futures. Crude oil futures are sharply lower this morning, down over $2/barrel at the moment. The US dollar isn't helping out much with grain prices today as it is slightly higher this morning. The grain markets are mostly ignoring outside factors so far today, though, as US weather concerns are taking the lead. With planting delays and cold weather to the southern plains there's enough to keep the markets supported for now. Today soybeans seem to be leading the way higher and tight supplies can be credited for the reason. There is little other fresh news for the grain markets today and it looks like we're going to end the week on a positive note.
China confirmed the purchase of US soft red wheat and the market is hoping that means there are more of these purchases to come as China works to build its stockpiles. Needless to say, the Chicago SRW wheat market is showing the best gains for of the wheat futures at the moment. Next is hard red winter wheat, which is finding strength from ideas that the US crop must be getting damaged by this cold weather. However, the extent of the damage will not be able to be fully assessed for a couple of weeks, so for now it's all just speculation. Spillover buying seems to be falling to the spring wheat market. Some support could be coming from continued snowfall in the top spring wheat producing state of North Dakota - but it's still pretty early to be getting worked up about spring wheat planting issues for now. Overall farmer selling has shut off since the March 28th USDA reports resulted in massive futures price declines. The slowdown in selling has resulted in basis values stabilizing, but when it picks back up we can expect basis values to relax.
Old crop soybean futures are posting better gains than new crop, which makes sense considering old crop supplies are tight and new crop acres are expected to increase in the US. The late start to planting in the US combined with falling corn prices will most likely result in US farmers switching to soybeans this spring. Commercial demand remains strong for old crop soybeans and farmer selling is slow, which is probably why we're seeing old crop prices so well supported over the past couple of sessions. Things are looking good in South America as harvest conditions in Argentina look to improve and Brazilian logistics are speeding up. Concerns remain about Chinese demand moving forward.
Corn movement is pretty slow right now and when combined with tight supplies, that makes for higher prices. Buying interest has been pretty strong in the corn market this week and that looks to continue today. Considering the pretty decent rally we've seen this week in corn futures today's price action could be fairly limited. However, US weather could be enough to keep the trade on edge. Little progress looks to be made in the US this weekend as far as planting goes and it seems the trade is generally just concerned about the month of April.
Have a good weekend - I hope nobody put their snow blowers away yet!
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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