SunPrairie Grain Morning Comment
MINOT - Jun 27/13 - 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 3-6 cents, buying interest picks up in front of tomorrow's pair of USDA reports (Mpls Sept last trade 7.87 ½, KC Sept 7.10)
Soybeans are 1-3 cents higher, pre-report buying interest, tight old crop stocks, final planting delayed by rains (Nov last trade 12.77 ¼)
Corn is down 1-3 cents, favorable crop weather, market sideways in front of tomorrow's reports (Sept last trade 5.73 ¼)
Sunflowers are unchanged, bean oil is slightly lower this morning but not enough to impact sunflower prices at this point, watch for changes in soybean prices
Canola is 5-10 lower, sell off in that market continues as the market searches for a bottom
Sorry I have not written a grain update these past couple of mornings. I have been working on something pretty exciting - perfecting the cash bids page for SunPrairie Grain's new website! The new site will be up and running within the next day or so, keep checking back to see all the improvements and additions that have been made.
*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:
The grain markets were in a bit of what is now being called "pre report consolidation mode". Has a nice ring to it, doesn't it? That basically means that grain markets were being sold off in front of tomorrow's highly anticipated USDA acreage and June 1 stocks reports. Corn futures did ok yesterday but bids rolled from the July contract to the September contract which had cash prices down pretty heavily; 32 cents to be exact. Old crop corn futures manage to stay higher as the market is trying to get domestic supply to move. Tight old crop supplies also keep the July and August soybean contracts higher. However, we're trading over the November contract and those prices were down two cents yesterday. Sunflower and canola prices fell with the soybean market yesterday as there is little else to provide support. Wheat prices were lower with row crops. Hard red winter wheat is seeing some harvest pressure which also drags wheat prices lower.
Today:
Grain futures are mixed this morning as the soybean and wheat markets are posting higher prices and corn and soybean oil are a bit lower. It looks like we're going to have a fairly quiet and choppy day ahead of tomorrow's USDA reports as trade is cautious. Export sales for the week were mostly within the range of estimates and offered little in the way of surprise, with the exception of wheat sales which were better than expected. The US dollar is under pressure as the market feels that the Fed is going to maintain its quantitative easing at the current level. The optimism has sunk the US dollar, boosted global stocks and worked to increase crude prices as well.
Buying interest seems to have picked up on the wheat futures side of things this morning. Maybe after the recent run of lower prices we're finding some support, or maybe investors are just interested in buying up some futures in front of tomorrow's reports. The hard red winter wheat market may struggle a little bit with the pressure from harvest. Some rains have fallen, delaying progress in areas, but overall things seem to be going well. Yield reports from Kansas are mixed, some areas have ridiculously poor yields and others are doing much better. It seems that the western areas of Kansas have the poorest yields (as expected, western Kansas was extremely dry) but central and eastern Kansas are seeing great yields - some are even saying up into the 50s. Kansas is the top hard red winter wheat producing state in the US. In the export world, Argentina is reportedly putting a halt on wheat exports in an attempt to keep domestic food prices from rising (bread, flour, etc.). US export sales for the week were pretty good, though, at 731.8 thousand metric MT(TMT) which is above estimates that ranged from 300-600 TMT. Tomorrow's USDA reports are expected to have June 1 stocks at 750 million bushels, higher than last year's 743 millbu June 1 stocks. All wheat acres are estimated at 55.751 million, up from the March intentions of 56.440 million. Spring wheat is expected to decrease by 600k acres from March intentions to 12.117 million - not really a surprise given the difficult planting season in North Dakota.
The soybean market is also seeing some pre report buying, tight old crop supplies also spur higher prices. The reports for tomorrow are expected to show tight stocks at 441 million bushels (667 millbu last June) and an increase in acreage from the March intentions report. US soybean acres are thought to be reported at 78.02 million, almost a million acres higher than the March intentions of 77.12 million. The increase is likely reflective of a switch of acres from corn to soybeans. Rains are delaying the final effort in areas of the Midwest, though, but even so acres look to increase. Export sales for the week were barely above estimates that ranged from 100-400 TMT at 465.6 TMT. Canola prices continue to stumble with the falling soybean market and a major, major market correction. Canola futures were just overbought and now the market is trying to find its bottom for now. Canola futures will keep an eye on soybean prices and Canadian crop progress.
The corn market is lower this morning as prices struggle to maintain gains with crop favorable weather. Crop condition estimates are expected to improve again in Monday's report - the crop was rated about 65% good to excellent this last Monday, which was pretty good. High crop condition ratings mean that yields could run pretty well too. Corn is estimated to lose about two million acres in tomorrow's USDA report. Corn acres are the big wild card in the report tomorrow. The average market estimate for US corn acres is 95.340 million, down from March intentions of 97.282 million and last year's 97.155 million. Corn stocks are expected to come in at 2.856 billion, compared to last year's number of 3.148 in the June 1 stocks report. Export sales for the week were better than we've seen recently at 490.3 TMT (mostly old crop) and in line with estimates that ranged from 200-500 TMT.
It looks like it will be a fairly quiet and choppy day for the grain markets today as the markets await more exciting news for tomorrow.
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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