SunPrairie Grain Morning Comment
MINOT - Jun 5/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
[cid:image001.jpg@01CD002F.571BB930]
Market Outlook as of 8:30 AM CDT:
Wheat is 0-3 cents lower, demand concerns and falling with weaker row crop prices (Mpls July last trade 8.21 ½, KIC July 7.50 ¾)
Soybeans are mixed, old crop stronger and new crop down 5-9 cents, technical selling combined with ideas that the crop will get planted push futures lower (Aug last trade 14.53)
Corn is mixed, old crop up two cents on tight supplies, new crop down 3-5 cents as the market is comfortable with planting and conditions numbers (July last trade 6.62 ¼)
Sunflowers are unchanged, soybean oil is quiet/mixed this morning with a confused soybean market, higher crude prices could support
Canola is down 10-20 cents, selling continues in that market, Canadian planting has gone much better than expected which likely also pressures futures
*AOG Contracts*
If you have an Act of God contract with us and are/were unable to get your crop seeded, please let us know as soon as possible. Also, just a reminder, we need a copy of your FSA 578 forms on seeded and PP acres when they're available for all AOG contracts (HO Sunflowers, Victory Canola, commodity canola, flax and NuSuns). If you have any questions please let us know. Thank you!
Yesterday:
I'm so sorry I did not get a morning email out as it was a bit of a busy morning and I was unable to get it written. I'll do my best to make up for it today and cover some of what was missed! Yesterday's session saw trade dominated by news from the release of the USDA's weekly crop progress and conditions report. I'll go over the details later but the bottom line is that corn planting/conditions look good and the market is confident the soybean crop will get in as well. Weather forecasts are also calling for crop favorable weather across much of the Midwest, which also discouraged higher prices. Old crop corn futures, though, gained on tight supply concerns and that market finished the day higher while deferred contracts were all lower. Soybeans were pressured lower with selling and crop progress, old crop finished the day down six cents. Canola was sharply lower yesterday, dropping 55 cents/cwt. I think good Canadian planting progress probably has a lot to do with that. Spring wheat prices were down two cents on the day and hard red winter wheat prices were down a penny. Fund selling was enough to push wheat prices lower, concerns about demand did not help either.
Today:
Again we're seeing old crop corn and soybean futures strengthen relative to new crop futures. Currently, old crop corn is up about four cents and soybeans are up about six. New crop beans are down a dime and new crop corn is a nickel lower. Speculative profit taking seems to be having something to do with the fall in new crop corn and soybean futures. Wheat prices are a bit weaker with row crops and demand concerns as the GMO issue continues to get worked out. Outside markets are favorable with the US dollar lower this morning and crude prices up about 55 cents/barrel. Informa Economics, a private market analyst, is to release its updated global production estimates today and the USDA will have its monthly S&D report released next Wednesday.
South Korea says that it will not restart imports of US wheat due to the GMO issue...even though tests of US shipments have yielded no GMO wheat. Japan is also holding off on further purchases of US soft white wheat but is continuing to buy hard wheats. The GMO investigation on the farm continues and Monsanto says it believes this is not a widespread incident. From what I'm hearing around the rumor mill it sounds like the farmer was unaware that he had seeded GMO wheat until he decided to go spray it down and it didn't die, at which point he turned himself in. This is all just hearsay, though, so take it for what it is. Planting delays in North Dakota are providing some support to the spring wheat market. Overall US spring wheat is 80% planted, behind the 92% average. North Dakota spring wheat is 25% behind the average pace at 64% complete. Ratings are coming back pretty strong at 64% good to excellent, which is a pretty good start. Russian production is picking up substantially this year from last year, meaning they will be more of a competitor in the global export market.
The market is starting to feel pretty confident that the US soybean crop will get planted. The USDA on Monday put planting progress at what the market expected - 57% complete, which is still behind the 74% average pace. However, favorable weather forecasts have the market not quite so concerned. There are several states that are pretty far behind on progress but, like I said, the market is just not too concerned about it at this point. The market could really use some more bullish news to get prices excited. Futures looked overbought Monday and have done nothing but been sold off since. Overall the market is expected that the US will get around 78 million acres of soybeans in and have an average yield of about 43 bpa. This would put the crop at around 3.3 billion bushels. Brazil is still exporting beans at a pretty steady pace, despite some logistical issues, which could keep old crop prices from rising too much.
Corn futures are starting to relax a bit about US planting and conditions. The USDA pegged US planting progress at 91% complete which is only 4% behind the average pace. Minnesota, Iowa, Wisconsin and ND planting numbers are behind a bit. North Dakota corn planting is 84% complete, versus a 93% average. I'm not sure how much more will get planted in North Dakota. Conditions are pretty good, though, at 63% good to excellent. With good condition ratings that means the market now expects decent yields. So the market figures that the US will have 95 million acres of corn at about 155 bushels to the acre - that puts us at nearly a 15 billion bushel corn crop. Weather looks to be ok for the last bit of planting to happen and seems ok for crop development as well.
Kayla Burkhart
Broker/Procurement
SunPrairie Grain
[image003.jpg]
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
DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express or an implied promise, guarantee or implication by or from the author(s) that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its staff or its management.
Only active subscribers can read all of this article.
If you are a subscriber, please log into the website.
If you are not a subscriber, click here to subscribe to this edition of the STAT website and to learn more about becoming a subscriber.
