SunPrairie Grain Morning Comment
MINOT - Apr 16/13 - 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 3-7 cents, Minneapolis leads the way higher, wheat rebounds a little after yesterday (Mpls May last trade 8.05, KC May 7.36 ¼)
Soybeans are 7-13 higher, speculative buying hits the market after yesterday's sharp selloff (May last trade 14.05 ¼)
Corn is 2-4 higher, slow US planting progress, "turnaround Tuesday" (May last trade 6.51 ¼)
Sunflowers are up 10-15 cents, bean oil is higher this morning despite a continuously falling crude oil market
Canola is 10-20 cents higher, futures recovering some of what was lost yesterday in the late session selloff
*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:
A huge collapse in the US stock markets combined with a heavy selloff in crude and gold markets and a stronger US dollar were enough to push our grain prices sharply lower in yesterday's session. Soybeans ended the day 18 cents lower with concerns about Chinese economic growth adding to losses. Canola, sunflowers and flax all followed a lower soybean and soybean oil market yesterday. Sunflowers were down 30 cents, canola down 50 cents and flax was down a dime. Corn lost 12 cents, taking cue from the collapse in outside markets. Wheat followed the row crops as well as gold and energy markets and finished lower for the day. Spring wheat held up well, considering the losses in the winter wheat markets. Spring wheat was down nine cents for the day and hard red winter wheat was down 21 cents. Even the confirmation of a sale of soft red wheat to China couldn't get the wheat market to work its way higher.
Today:
Grain markets are seeing a little bit of a recovery today, thankfully, as it seems that buying interest has hit the markets a bit today. There are also some thoughts that maybe yesterday's losses were a bit overdone for the grain markets as well. Crude oil cannot find much relief at the moment as it's down another 60 cents/barrel after losing nearly $3/barrel yesterday. Of course, crude futures are $2/barrel off their overnight lows so I guess you can consider losses of 60 cents/barrel to be not so terrible, considering where prices were at in the overnight session. The grain markets could be finding some support from a falling US dollar this morning as well. It seems that macroeconomic issues have started to play a little bit of a bigger role in grain trade this week. Tight US old crop corn and soybean supplies should not be forgotten either, and old crop values will likely stay supported.
The US wheat market is still concentrating on demand news. Recent reports of sales to China should be considered favorable but it seems that their primary purchasing interest is for soft red wheat and not either of the hard wheats at the moment. Hopefully export pace continues to be at good levels but last week's sales numbers were a bit discouraging. There was little change made to the US hard red winter wheat crop condition ratings this week. The HRW crop was left unchanged at 36% good to excellent with some shifts made in categories in the state by state breakdown. The market knows that some damage occurred from last week's frost, but we still need time to assess that damage. There are also chances of more frost for later this week. In yesterday's crop conditions and progress report we saw spring wheat planting progress reported for the first time this year. Overall the US is 6% planted on its spring wheat, behind the 13% average. Washington and Idaho are ahead of their average pace as favorable spring weather allows for rapid planting. North Dakota spring wheat planting is at, not surprisingly, 0% complete with the five year average at 7% and 25% planted at this time last year.
News that China is to plant more corn acres this year is favorable for the soybean market as it means that less soybeans will get planted in China this year. Hopefully this translates to more soybean demand for China in the coming year. There are reports of Chinese poultry consumption falling substantially in areas due to the bird flu, according to some large feed processors. How will this impact nearby demand? This news, combined with poor Chinese economic data, was enough to push soybean prices lower yesterday. Sharply lower crude prices didn't help either. Today, though, we're doing much better. Soybeans are up nearly 17 cents at the moment and look to recover all that was lost yesterday. Soybean oil is recovering as well and canola futures are performing better also. All in all, it looks to be a pretty good day for our oilseed markets.
US corn planting was pegged at 2% complete as of Sunday evening. The market was expecting to see planting progress at 6% complete in the report, which would have put US planting just one percent behind average pace. I think that was a pretty aggressive expectation for the marketplace considering the planting delays we've been talking about over the past couple of weeks and the fact that Texas is the only state that is on pace so far. It's still early to be getting worked up about planting progress but the market is just keeping a watchful eye. It should be noted though that further rains are expected to delay the US planting effort this week. Even the corn futures don't seem too concerned as old crop futures are rallying much better at the moment than new crop, which are six cents behind in gains at the moment. Argentina is reportedly selling lots of corn for export at the moment as it's running a lot cheaper than US corn right now. Will we see more corn into the US marketplace as well?
The below is a link to the US drought monitor that was sent to me by Brian Rydlund at CHS Hedging - illustrates what we've been thinking about the drought being pretty much a nonevent in the eastern corn belt but still being very prevalent in our western corn producing areas.
http://droughtmonitor.unl.edu/
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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