SunPrairie Grain Morning Comment
MINOT - May 24/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:20 AM CDT:
Wheat is 0-3 higher, concerns about US winter wheat crop are about all that keep the market supported (Mpls July last trade 8.15 ¾)
Soybeans are mixed, old crop is down about eight cents but new crop is 2-4 higher (July last trade 14.91 ½)
Corn is down 2-4 cents, planting expected to be nearly on pace in Tuesday's USDA crop progress/conditions report (July last trade 6.59 ¼)
Sunflowers are down 0-5 cents, lower bean oil and struggling crude will pressure sunflower prices
Canola is 5-10 cents higher, futures up a bit this morning with stronger NC beans, old crop futures lower
Yesterday:
Grain futures started out the day fairly quietly but suddenly surged higher as buying interest surfaced. Soybeans had a crazy day yesterday with the July contract seeing a nearly 60 cent trading range throughout the session and finishing the day a nickel higher. Canola was slightly higher for the day and sunflowers were quiet. Wheat futures were higher all morning due to short covering and better than expected export sales reported for the week. Concerns about the US winter wheat crop supported things as well. Spring wheat finished the day five cents higher and hard red winter wheat was up 11 cents. Corn looked to start the day a bit lower but found strength with the rising wheat and soybean markets. Tight old crop corn stocks probably helped things out, too, pushing corn futures to finish the day up four cents.
Today:
It looks like we're going to finish out the week on a lower note in the grain markets today. Outside markets are mixed for us again with the US dollar weaker and crude prices down about 90 cents/barrel. There's not a really good reason being given for the lower price action that we're seeing this morning that is erasing most, if not all, of yesterday's gains so far this morning. Markets are closed Monday for the Memorial Day holiday so there will not be a morning grain update that day. Additionally - the USDA's weekly crop progress/conditions report will be delayed a day and released on Tuesday afternoon. Trade is closed Sunday night/Monday and resumes Monday evening at seven pm.
Spring wheat is expecting to be 80-85% planted in next week's weekly report, which would put us close to back on pace. Some of the areas of North Dakota that received about 10 inches of rain (north eastern ND) could be in the field by this weekend. Field work resumed in the Bowbells area yesterday and I think that quite a few more will be trying again today further south. Hard red winter wheat crop concerns could keep that market supported and limit losses today. Forecasts look to remain hot and dry as the crop enters the heading stage. Export sales yesterday were much stronger than the market expected and could also provide some underlying support if the demand continues. Without confirmation of additional demand, though, it will be pretty quiet.
There are reports that the Argentinean port strike has ended, meaning that Argentina will likely now resume shipments of corn and soybeans. Old crop soybeans are lower this morning as the market relaxes after the crazy day of trading that was yesterday. Additionally, US processors have managed to get their hands on supply which is cutting commercial demand for old crop soybeans at the moment. Basis values are scaling back and it looks like futures are following. News that China bought some new crop US soybeans is encouraging, though, and new crop futures are a few cents higher. Soybeans are expected to be 40-45% planted in Tuesday's USDA report - that still keeps us behind the average pace of 61% planted.
Birdfood demand spiked and now seems to be falling off. Buyers in that market have found a pattern. Every few months they are strong buyers and they bump up their demand for a couple weeks, which is good for prices. Once coverage is found, prices relax and it again becomes a quiet market. It's a good idea to price sunflowers during this time if you still have some to take advantage of these price spikes. Today soybean oil is quiet so that means that not much is likely to happen to NuSun prices today.
The market is estimating US corn planting to be 85% complete in Tuesday's report. This would put us only 5% behind the five year average and would probably eliminate any further concerns about corn planting. The market knows that the northern corn growing states (ND and MN) will not be able to plant all of their intended acres. However, across the rest of the US growing areas, the crop looks to go in and do well. Weather forecasts are mixed over the next couple of weeks but it looks to be mostly dry across major areas, allowing for those final acres to go in. Domestic demand for old crop corn remains strong which will keep old crop prices supportive. New crop prices will struggle as buyers are confident acres will get planted and prices will relax.
Have a nice weekend!
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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