SunPrairie Grain Morning Comment
MINOT - Jun 20/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:45 AM CDT:
Wheat is down 2-10 cents, spring wheat holds ground, winter wheat markets struggle with harvest pressure (Mpls Sept last trade 7.92 ¾, KC Sept 7.33)
Soybeans are 17-20 lower, poor export sales, general selling interest (Nov last trade 12.91)
Corn is down 8-10 cents, investor selling, increase in Argentinean production estimate (July last trade 6.76 ¼)
Sunflowers are down 15-20 cents, soybean oil is sharply lower with everything else this morning, pulling sunflowers along
Canola is down 20-25 cents, market sells off with soybean complex, crude
*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:
Grain futures looked like they were going to have a fairly quiet, lower trading session. Even for the first hour or so of the day session, prices were fairly uneventful. However, something sparked prices and we started trading sharply higher. Corn was led by tight old crop stocks and we saw old crop prices rise by nine cents. Wheat prices rallied not too long after the open on technical buying as winter wheat harvest is delayed due to rains and spring wheat acres are lower due to a poor planting season. Spring wheat finished the day 14 cents higher and hard red winter wheat was up 19 cents. Soybeans took cue from rising corn and wheat prices and joined in on the nice rally, gaining 21 cents by the time things were over. Canola traded higher with the soybean complex and NuSuns were stronger as well. Flax posted gains of 65 cents/bushel as buyers compete to buy any remaining bushels.
Today:
It looks like it's going to be a lower day for the grain markets this morning as most futures are posting pretty strong losses. Most action in the grain futures today is coming from outside markets. The US dollar is sharply higher and crude prices are down about $2.50/barrel at the moment. The Fed said yesterday that the US economy is growing at a rate that will now work to end quantitative easing sooner than what was expected. Stock markets are heavy this morning and general investor sentiment is negative, spurring selling across most markets in general today and the grain futures are no exception to that. Export sales for the week were also pretty dismal and will not be providing much, if any, support to grain futures this morning.
Informa Economics, a private market analyst, released their US acreage estimates yesterday. The estimates showed a 910,000 acre decrease in the other spring wheat category, with most of those acres likely to be in North Dakota. The acreage losses to the US spring wheat crop have been keeping prices supported recently. Today that is no exception as spring wheat is down only a couple of cents, compared to seven to ten cent losses in the winter wheat markets. Speaking of winter wheat, drier weather allowing for harvest progress seems to be adding weight to the futures markets this morning. Harvest reports continue to talk about high protein and good test weight with mixed yield results. Export sales for the week came in at 434.7 thousand metric MT(TMT) which is in line with estimates that ranged from 300-650 TMT.
Argentina decreased its 2012-13 soybean crop production estimate in its most recent report. However, the crop is still forecast to be 25% larger than last year's and the second largest crop on record. This news does not seem to be having much to do with today's price action as that seems mostly investor related. Informa Economics increased its US acreage estimate by 630 thousand acres to 77.7 million, likely reflecting a switch from unplanted corn acres. Export sales for the week for soybeans were just sad at 161.1 TMT, below estimates that ranged from 350-600 TMT. Canola futures are lower this morning as the sell off from the soybean market hits canola futures too. Falling crude prices do not help provide any support either. All in all, it looks to be a pretty bad day for the oilseed markets.
Corn is finding no protection from today's downward price action as old crop futures are down a nickel and new crop about eight cents. Informa Economics decreased US corn acres to 95.2 million. Using the current USDA yield estimate of 155 bpa - that puts US total production at 14.7 billion bushels. Argentina increased its 2012-13 corn crop estimate to a record number, meaning that Argentina will continue to provide a lot of competition in the global marketplace. Export sales for the week were 210.5 TMT, just barely above the low end of estimates that ranged from 200-450 TMT.
Investor selling weighs on grain futures today as the US dollar surges and crude prices fall. There is little fresh fundamental news to drive grain prices and the grain markets continue to focus on US weather, yield and acreage estimates.
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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