SunPrairie Grain Morning Comment
MINOT - May 7/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:40 AM CDT:
Wheat is 0-2 cents higher, market bounced and faded with corn prices, delayed spring wheat planting and declining hard red winter wheat crop conditions had futures higher (Mpls July last trade 8.06, KC 7.58 ¾)
Soybeans are up 6-8 cents, domestic demand strong, hopes that corn gets planted and US acres will not increase by as much as thought (July last trade 13.76 ¼)
Corn is mixed, new crop lower but old crop slightly higher, planting progress softens new crop prices but old crop supported by tight supplies (July last trade 6.37)
Sunflowers are up 0-5 cents, stronger soybean oil and soybean prices are working to lift sunflower prices
Canola is 0-5 higher, with soybean complex, fading crude prices may limit gains
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Yesterday:
Grain futures were under heavy selling pressure yesterday as weather forecasts turned collectively favorable for planting progress. Last week forecasts were mixed and conflicting, now it seems that warmer, dryer forecasts are around and that should allow for some pretty decent progress this week. Corn was leading the way lower as it looks like the US will be able to get much of the crop planted within the next couple of weeks which will help eliminate some yield loss concerns. Corn prices finished the day down 25 cents and worked to pull everything else down with it. Soybeans resisted losses for much of the session but eventually succumbed to selling pressure and lost 18 cents on the day. Soybean prices were mildly supported by ideas that since the US corn crop looks to get planted, less acres will switch to soybeans. Canola and sunflower prices fell with the soybean complex. Wheat prices were lower with corn as spring wheat planting prospects look good and rain was forecast for the hard red winter wheat crop. Spring wheat was down 14 cents and hard red winter wheat was down 22 cents.
Today:
It looks like grain prices are trying to recover a little bit this morning but prices are fading a little bit at the moment. Old crop corn prices are a couple cents higher but new crop are struggling with ideas that the crop will get in the ground, but just a little late. Soybeans are posting pretty decent gains this morning as old crop demand is high and the market is hopeful that less acres will be switched from corn. Wheat futures are attempting to follow corn prices higher but having a tough time doing so right now. Buying interest seems to have been spurred after yesterday's sharply lower price action. Outside markets are mixed right now with the US dollar trading lower and crude prices down about 50 cents/barrel as well. The USDA is to release its monthly S&D report on Friday at 11:00 AM.
The USDA released its weekly crop progress and conditions report yesterday afternoon and didn't really provide too much information that wasn't expected. Spring wheat planting is still behind at 23% complete overall versus a 50% five year average and 82% planted last year. North Dakota spring wheat is, as of Sunday evening, 7% planted (5% jump from last week) which is well behind the five year average of 40% complete and last year's 80% complete. However, progress will likely be pretty substantial this week and next week as weather forecasts look good and fields are drying out. The USDA decreased hard red winter wheat crop conditions by another percent, taking conditions to 32% good to excellent. The poor to very poor rating jumped considerably from 35% last week to 39% this week. Russian weather could be supportive as forecasts are for hot and dry weather right now.
Soybeans are charging higher today as the market is pretty excited about high prospects for corn planting progress, which will likely mean that less corn acres will go to soybeans. Old crop prices are showing a bit more strength due to strong demand and slow farmer selling. However, prices could be reaching a point where the US starts to import beans from South America. Speaking of South America, the export market has been pretty well plugged with its soybeans which could cut off demand for US exports for now. The USDA pegged US soybeans at 2% planted versus an average of 12% and last year's 22% complete. North Dakota soybeans are 0% planted, which puts us 3% behind the five year average and last year's progress of 10% complete at this time. Canola and sunflower prices look to be unchanged to steady today with the stronger soybean complex. There is little else going on to drive oilseed prices right now.
Well the corn market was a bit disappointed by the planting progress number of 12% complete - but I personally felt that market estimates for corn planting numbers were a bit aggressive. The average corn planting number is 47% complete at this time and last year the US was 69% planted. North Dakota corn is 1% planted, versus a five year average of 25% complete and last year's 52% complete. All top producing corn states are significantly behind in their planting effort. This week there is expected to be strong progress made as forecasts dry out and warm up which is the reason for struggling new crop prices this morning. The crop is by no means secured yet - so prices will remain volatile and subject to swings in weather forecasts. Old crop prices will continue to be supported by a complete lack of producer selling. High prices could keep end users importing corn.
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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