SunPrairie Grain Morning Comment
MINOT - Jun 13/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:55 AM CDT:
Wheat is mixed, spring wheat higher but winter wheat markets lower, harvest pressure lets w.wht fall while s. wht boosted by planting delays/ideas of acre losses (Mpls July last trade 8.09 ¾, KC July 7.15)
Soybeans are down 9-16 cents, follow through from Wednesday's weakness and technical selling, good planting progress expected this week (Nov last trade 12.98 ¼)
Corn is 3-5 lower, buyers go to South America for supply, trading lower after yesterday's bearish USDA numbers (July last trade 6.45 ¾)
Sunflowers are down 5-10 cents, with weaker bean oil and crude as well as soybeans
Canola is down 20-25 cents, taking cue from a falling soybean complex, selling continues to hammer the futures market
*Minot Main Scheduled Maintenance Closure*
The Minot Main facility will be closed for dumping July 1st-3rd for scheduled maintenance. Offices and the Minot East and West facilities will be open during this time. Thank you for your cooperation!
*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:
Markets were fairly quiet in front of the release of the USDA's monthly S&D report. When that was released, prices moved lower as what was said was considered fairly bearish for grain prices. Corn saw 2013-14 stocks cut slightly due to a 1.5 bushel per acre yield reduction. However, ending stocks are still estimated to be the biggest in nearly 10 years at 1.949 billion bushels. The corn market was hoping to see a reduction to acres but that did not happen and US acres were left unchanged at 97.3 million. Prices finished the day nearly a dime lower on the news. Soybeans were off 13 cents for the day as the USDA pretty much left everything unchanged, which the market took as bearish. That makes sense considering soybeans have been rising lately due to concerns about planting delays. US 2013-14 wheat stocks were cut yesterday but prices looked to row crops for direction and finished the day lower. The cut came from an increase in exports which worked to overpower the increase in production. Spring wheat was down nine cents and hard red winter wheat was off 14 cents.
Today:
Grain futures are again lower this morning, with the exception of spring wheat which is holding its ground and trading a few cents higher. It seems the unfavorable news from yesterday's USDA numbers is enough to keep the row crops lower while hard red winter wheat is falling most likely due to harvest pressure. Since the USDA did not change any acreage estimates yesterday the markets will now turn their focus to the June 28th acreage report. The corn market will be looking for reduced acres. Export sales for the week were uneventful and not very helpful to grain futures. The US dollar is lower and crude prices are down about 20 cents/barrel.
There are ideas that yesterday's losses in the wheat markets were overdone, considering the reduction to US 2013-14 ending stocks. However, the decline in carryout was less than expected and falling row crops are enough to keep wheat prices in check. Spring wheat is still finding support from late planting and ideas that acres are going to be reduced due to the unfavorable weather seen throughout the planting season across the top producing state of North Dakota. Winter wheat prices are just a few cents lower this morning with the likely reason being harvest pressure. Export sales for the week were not anything exciting at 435.3 thousand metric MT just above the low end of estimates that ranged from 400-650 TMT. A Russian estimate increased their wheat crop size, which may add more weight to prices considering global stocks seem to keep on climbing.
The soybean market is following through from Wednesday's losses. The fact that the USDA left everything unchanged after the market has built in a premium from weather and planting delays has the market correcting and pulling back. Technical selling is also to blame. Midwest weather has been mostly favorable this week and prices are drifting lower as planting progress looks good for the week. There are chances of rain that may delay further planting in areas over the weekend but forecasts will be studied much more closely tomorrow. There are also some Chinese economic concerns that could be boosting demand worries. Export sales for the week were 480.6 TMT, in line with estimates that ranged from 300-700 TMT.
Corn really saw the worst news in yesterday's report as the market was hoping to see a reduction in US acres. Instead we saw a decrease in yield and acres left unchanged. This has many in the marketplace thinking we should ignore what the USDA said about acres yesterday and focus instead on the June 28th acreage report. However, the grain futures are not doing that and we're looking at the huge carryout number for 2013-14 that the USDA gave us yesterday. Export sales for the week were really sad at 149.5 TMT - below aggressive estimates that ranged from 400-650 TMT. South Korea has been in the market for corn, but it's largely believed that they'll be taking their business to South America as its corn is less expensive.
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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