SunPrairie Grain Morning Comment
MINOT - May 13/13 - 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 seem to be losing steam this morning as winter wheat crop concerns work against ample global supply (Mpls July last trade 8.09 ¼, KC July 7.60)
Soybeans are 3 cents higher on old crop, 1-3 cents lower on new crop, new crop planting progress limits gains, tight old crop supplies lift that market (July last trade 14.03 ¼)
Corn is up 4-6 cents, market uncertain about planting progress estimates, helps provide a bit of a price bump today (July last trade 6.42)
Sunflowers are down 0-5 cents, weak soybean market combined with falling crude prices lets bean oil drift lower, likely pulling sunflowers along
Canola is 10-15 cents lower, with soybean oil and crude prices, planting progress likely providing pressure as well
Friday:
Markets were quiet in front of the release of the monthly USDA S&D report and then turned sharply lower as the numbers on the report were viewed as negative to grain futures overall. Wheat prices were lower from the get go and after the release of the report never looked back. Spring wheat finished the day down 17 cents and hard red winter wheat was down 21 cents on the day. US 2012-13 ending stocks were left unchanged from last month's estimate at 731 million bushels, which was about what the market expected. US 2013-14 ending stocks were above the average estimate of 627 millbu at 670 millbu. Global carry over numbers remained strong and look to stay that way for 2013-14 as well and is likely the reason why we saw wheat prices sharply lower Friday. Notable increases were made in black sea 2013-14 production estimates, as well as Australian, Argentinean and Canadian estimates. Corn prices did not do much better than wheat, finishing the day down 12 cents. US 2012-13 carry was increased by two million bushels to 759 millbu and 2013-14 carryout came in at 2 billion bushels. The USDA put US corn yield at lower than the baseline numbers but with such a large jump in carryout prices were lower. World carryover numbers look to increase substantially within the next year as well. Soybean numbers didn't change much, the 2013-14 carryout number came back higher than expected at 265 million bushels, compared to this year's 125 millbu estimate.
Today:
Grain markets are mixed this morning, seemingly unable to make up their minds as to which way they want to go. It looks like higher may be the tone of the day, though, as uncertainty about what the USDA's weekly crop progress and conditions report might say dominates trade. Additionally, we're back to watching weather forecasts and things look pretty good for planting progress over these next few days across many of the major US growing areas. Other than planting and weather there is little fresh news to guide prices and it seems that we've digested what the USDA had to say Friday. Outside markets are not so favorable with the US dollar trading higher and crude prices down about 85 cents/barrel.
The wheat markets are seeing pretty thin trade so far this morning which is likely leading to the choppy price action we've been seeing so far today. Spring wheat is up about two cents and hard red winter wheat is seeing gains of four. The wheat market really saw a lot of global production estimate increases from the USDA on Friday and it's going to take more than just a day to digest that information. Nearly every major wheat producing country saw an increase in its production estimates from the USDA on Friday. An increase in production will also result in an increase in available supply for export, and with Russia's large production increase for 2013-14, we can expect to see exports increase as well. Any concerns about the state of the US hard red winter wheat crop are offset by global production right now.
Soybeans are seeing old crop values perform better than new crop as old crop supplies are tight in the US right now. However, as prices in the US continue to climb in order to ration out the remainder of the crop, buyers look to South America as a good supply source for soybeans. We will most likely see more soybeans come to the US from South America as processors need to get their hands on product to stay in operation. New crop prices are not climbing by nearly as much as old crop prices as the supply and demand situation is completely different. The market is concerned about long term demand due to the South American crop size and any economic uncertainty in China. Additionally, it looks like the US crop is going to get in the ground, which will have the market wondering about where supply is at. We're expecting to see the USDA peg planting at 8-10% complete in this afternoon's report.
Speaking of planting, the corn market is expected to see US planting at 25-30% complete as of yesterday afternoon in today's report. If realized, this puts us pretty dang close to the slowest planting year on record so far. The five year average is for 66% planted but good progress is expected to be made again this week. The 6-10 day forecast calls for rain across much of the corn belt which may put many growers in the US working against the clock to get the crop in before it gets to a point where yield losses are too great. Export demand remains fairly quiet. The USDA cut old crop exports on Friday, but that was offset by an increase of corn used to ethanol.
It's all about planting and weather again since the USDA report has come and gone. Keep and eye on forecasts and I'll keep you posted on what the USDA says about progress. Things look pretty good in our area, though, and it's great seeing you guys out there!
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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