SunPrairie Grain Morning Comment
MINOT - May 9/13 - 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 0-2 cents, markets mixed with a confused market and ahead of tomorrow's USDA report (Mpls July last trade 8.16, KC July 7.62)
Soybeans are 6-14 higher, old crop higher with tight supplies, new crop struggles with ideas planting progress will pick up (July last trade 14.04 ¼)
Corn is 1-3 cents higher, cautious in front of USDA report, improved US planting outlook limits gains (July last trade 6.35 ¾)
Sunflowers are up 10-15 cents, stronger soybean oil lifts sunflower prices higher, birdfood demand strong enough to support higher prices also
Canola is 0-5 higher, old crop stronger while new crop struggles with thoughts planting may not be as negatively impacted as thought
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Yesterday:
Grain markets were mixed yesterday but corn again led the way lower. It's looking more and more like the US will get its corn crop planted which had corn prices on edge yesterday. Cash prices finished the day down seven cents, pushing back below six dollars. Soybeans did better yesterday, though, as an early soybean sale announcement combined with tight US old crop supplies had prices finish the day up eight cents. Canola followed a stronger soybean market but flax and flower prices both fell a dime. Wheat futures were higher yesterday but a fall in spring wheat basis had cash prices down three cents for the day. Hard red winter wheat futures were up two cents yesterday. Beneficial rains to areas of the US, Russia and Australia all worked to limit wheat gains yesterday.
Today:
Trade seems fairly cautious in the grain markets today in front of tomorrow's USDA report. Traders are evening positions and making their estimates as to what the USDA may say tomorrow. Corn and wheat futures are up a couple of cents and soybean futures are up over a nickel. Outside markets are not helpful to the grain markets today as the US dollar is higher and crude prices are about 65 cents/barrel lower at the moment. Export sales for the week were uneventful and not terribly supportive to prices. Corn sales really disappointed but the market does not seem to be paying much attention. The USDA will release its monthly S&D tomorrow at 11:00 AM.
Spring wheat basis is starting to crumble as end users are getting the coverage they need and demand is still lacking anything super exciting to keep prices supported. Local movement will be slow through the planting season but we're expecting to see things pick up once planting is complete and growers begin to make room on the farm for new crop. This could work to further depress basis values should a large pre-harvest movement happen. Wheat prices are following the corn market today as they finished the overnight session slightly lower with corn prices and are now working their way higher as corn prices have turned around. Ideas that the USDA could sharply cut this year's production from last year's numbers for hard red winter wheat may be supporting that market quite well. Beneficial rains reportedly fell to some areas of the US southern plains. Dry areas of Australia and Russia also saw some needed relief. Export sales for the week were estimated to be between 400-600 TMT and came in at 465.5 TMT.
Old crop soybean beans are pretty substantial this morning which is a bit surprising considering the confirmation of US purchases of South American soybeans. US old crop soybean supplies are pretty tight and processors are desperate for product that isn't budging from the farm right now, which has resulted in the import of South American beans. New crop futures are not seeing the gains that the old crop futures are as the market gains confidence that soybean acres will get planted in the US this year. Also, ideas that 2013-14 acres in South America could increase could weigh on things. Export sales for the week came in at the low end of estimates which ranged from 400-600 TMT. Sales were reported at 585.5 TMT.
Birdfood sunflower demand has picked up as buyers all seem to need product at the same time. Long term demand for sunflowers does not seem conducive to support inflated prices but a bump in birdfood prices right now stems from some nearby demand that needs to be covered. Once that demand is met sunflower prices will likely relax again. The crush market knows there's still a lot of product to move and demand is not great enough to boost prices by much. We'll also need to keep an eye on the soybean complex for an indication of movement in sunflower prices.
The improved US planting outlook is putting a cap on corn prices this morning but we're still seeing slight gains in front of tomorrow's USDA report. Some rains to the western corn belt over the past day or so may be providing some price support but the rains seem hardly justification enough for the gains we're seeing right now. Export sales for the week fell short of estimates that ranged from 400-800 TMT. Sales came in at 285.7 TMT. There are thoughts that the USDA will increase the 2013-14 US carryout number in tomorrow's report.
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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