SunPrairie Grain Morning Comment
MINOT - May 20/13 - 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 up 2-4 cents, spring wheat planting delays and higher corn futures (Mpls July last trade 8.07 ½, KC July 7.38 ¾)
Soybeans are down 1-10 cents, old crop supported by tight supplies, new crop sharply lower on thoughts of corn acreage switches (July last trade 14.48 ¼)
Corn is up 1-4 cents, old crop tight supplies boost old crop and new crop planting progress has those futures pressured (July last trade 6.56 ¼)
Sunflowers are unchanged, soybean oil and crude futures are quiet this morning, weaker soybean market could eventually pull sunflowers lower
Canola is not trading today - Victoria Day in Canada
Friday:
Grain futures started out the day a bit lower but corn and soybeans managed to work their way higher as the day progressed. Wheat futures, though, stayed lower all day. Improving hard red winter wheat crop conditions combined with good spring wheat planting progress had futures on edge. Spring wheat finished the day down 11 cents and hard red winter wheat was six cents lower by the end of the session. Corn futures were lower but buying interest worked to pull futures higher and corn finished up 11 cents. Soybeans performed the best of the day with tight old crop supplies and ideas of minimal acreage switches from corn due to strong planting progress. Soybeans were up 21 cents for the session. Canola prices were higher, gaining about 10 cents/cwt. Sunflower and flax prices were left unchanged.
Today:
The market can't decide if it wants to focus more on planting progress made last week or poor weather forecasts delaying further progress for this week. The corn and soybean markets are mixed this morning with old crop tight supplies keeping losses limited on those futures months but new crop planting progress letting prices fall in those months. Wheat futures are mixed as well. Spring wheat futures are garnering strength from North Dakota rainfall and seemingly pulling the winter wheat markets along for the ride. Outside market influences are mixed with the US dollar trading lower and crude futures about 40 cents/barrel lower at the moment also. The grain futures will be looking forward to what the USDA will say in this afternoon's weekly crop progress/conditions report.
As I mentioned above, spring wheat futures are finding some of their price support from planting delays in North Dakota/Minnesota. Heavy rainfall will keep us shut down for a few days and the market is reacting by giving us about three cents at the moment. Good progress was made over the last week, though, and the market is estimating that the USDA will peg US spring wheat planting at as much as 70-75% complete this afternoon, which seems like a pretty aggressive jump from last week's 43%. Private market analyst, Informa Economics, on Friday estimated that "other spring wheat" acres would be down by about 300k acres from their last estimate. Higher spring wheat futures are lending a helping hand to the winter wheat markets, which were a bit lower when I first came in this morning. There are ideas that we could see more wheat into feed rations with tight old crop corn supplies keeping prices high.
Soybean futures can't seem to make up which way they want to go with the July contract trading a little higher but every other contract is lower. New crop soybean futures are really struggling right now as the market is again working the fear of corn acres switching to soybeans back into prices. The biggest acreage switches would likely occur in MN and ND, where weekend rains have been the heaviest and corn planting got off to a late start. Informa Economics increased its soybean acreage estimate by 1.2 million, how many of those acres will come from corn? The USDA is expected to put US planting at 20-25% complete in this afternoon's report, a bit behind the five year average of 42% complete. How much progress will get made for this week?
Corn is expected to see a huge jump in planting progress this week, going from 28% completed last week to 60-65% complete this week. The five year average is at 80% complete for this week and if we can't make much progress this week due to weather issues we could see planting fall behind again. The market cannot decide whether it wants to pay more attention to last week's progress or this week's potential lack of progress. Informa Economics decreased its US corn acreage estimate by nearly 500k to 96.8 million. Given a yield of, say 145 bpa, this still puts us at well over a 14 billion bushel crop. So the acreage reduction won't really do much to help boost prices. The US is still going to produce a lot of corn.
Today it looks to be a quiet, mixed day in front of the USDA's weekly crop progress and conditions reports. Weather forecasts will also have a huge influence on prices as further delays are not needed.
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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