SunPrairie Grain Morning Comment
MINOT - May 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 2-4 cents, buying interest hits the market after yesterday's price declines as the general feeling is that losses were overdone (Mpls July last trade 8.07 ¾, KC July 7.55)
Soybeans are 5-7 cents higher, Chinese new crop demand purchases confirmed, speculative buying (July last trade 14.18)
Corn is down 1-3 cents, poor weekly export sales, good US planting progress this week (July last trade 6.48 ½)
Sunflowers are up 5-10 cents, stronger soybean and crude oil support sunflower prices
Canola is 5-10 cents stronger, following a higher soybean complex
Yesterday:
Grain trade yesterday seemed to be influenced mostly by outside markets and speculative selling. It looks like funds became sellers of commodities in general yesterday, working crude prices lower and taking the grains with them. Crude prices eventually recovered yesterday but not before grain markets were well into trading lower. Investors were pushing their money back into the US stocks markets as many were taking it out of the commodity markets. Improved US planting conditions did not help prices, either. Corn is expecting to see a good week of progress in the US which weighed on futures and had them finish the day a couple cents lower. Soybeans finished the day down two cents as well with a poor crush report really weighing on prices. Wheat futures were the biggest losers yesterday. Wheat initially took cue from lower corn and soybean prices but then ran with losses as the day progressed. Outside markets really pressured things and a general lack of favorable news only added to it. Spring wheat finished the day down eight cents and hard red winter wheat was down 16 cents for the day.
Today:
Grain futures are mixed this morning with wheat and soybeans recovering from yesterday's losses and corn continuing those losses so far this morning. Outside markets have turned around today with the US dollar a bit lower and crude prices about 40 cents/barrel higher. Speculative buying interest may be returning a little today, especially in the wheat markets as yesterday's losses were probably a bit harsh. Wet weather forecasts throughout the Midwest may provide some support but right now the trade seems focused on good planting progress made this week. Export sales for the week were poor, not providing any support for higher prices at all.
Concerns about the state of the US winter wheat crop in general could be providing some underlying support to those markets this morning. The market is just worried about crop quality and quantity at this point. However, that could soon be eased as soft red winter wheat harvest will begin within a month or so in areas. Dryness in the Black Sea Region could also be lending a helping hand to wheat prices as the market tries to figure out just how much damage, if any, is being done to the crop. There's a lot of global demand news around which may also be working to excite wheat prices. Wheat export sales for the week were the best of all the grains and actually came in above expectations of 200-500 thousand metric MT(TMT) at 540.6 TMT. Most of the sales were in the new crop time period, which makes sense since that starts June first. Today prices look mixed. If corn continues its weakness wheat will likely follow.
Soybeans could be finding some strength from Chinese demand for US new crop soybeans. Purchases of US new crop soybeans were made by China and confirmed yesterday which helped to limit some of those losses spurred by weak crush numbers. Crush numbers were pretty disappointing as many plants are reportedly taking a little bit of a break for now, citing several different reasons. Brazilian logistical issues are still a bit messy which could be enough to sway demand to the US. However, US old crop supplies are tight which does not make our soybeans cheap. Export sales for the week were reported at 361.9 TMT, just above the low end of estimates which ranged from 200-600 TMT.
Corn prices are really starting to struggle this morning with old crop values losing out the most. Weekly ethanol production numbers were pretty good, though, but those plants will have to work hard to get supply. Trade seems very cautious right now as the market is trying to figure out just how much of the US crop has been planted this week. Some are expecting to see record pace made over this week, which could help to erase planting delay worries. That isn't extremely likely, but good progress is expected to be made nonetheless and futures are struggling as a result. Export sales for the week were mostly old crop but still pretty disappointing at 258.5 TMT, just above the low end of estimates that ranged from 200-550 TMT.
Looks to be another choppy day today as the markets wait for Monday's planting progress/crop conditions report and to see what the weekend weather brings.
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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