SunPrairie Grain Morning Comment
MINOT - Jul 16/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:50 AM CDT:
Wheat is up 6-9 cents, following higher corn and soybean prices, on its own wheat has little reason to trade much higher (Mpls Sept last trade 7.61 ¼, KC Sept 7.08 ¼)
Soybeans are 17-20 cents higher, unexpected decline in crop conditions and drier weather forecasts have soybeans higher (Nov last trade 12.83 ½)
Corn is 8-10 higher, crop conditions fall, forecasts turn dry for pollination (Sept last trade 5.45 ¾)
Sunflowers are up 5-10 cents, bean oil stronger this morning with soybean market
Canola is 10-20 cents higher, futures rising with US markets, soybean complex
Yesterday:
Yesterday the markets thought that weather was not at all a threat to the crop, the US dollar was higher and funds seemed to be interested in selling which together led to a decline in grain futures yesterday, for the most part. Soybeans staged a late rally as stronger than expected crush numbers were released - creating enthusiasm in the soybean futures given the tight old crop supply situation we currently have. Other oilseeds did not do so well yesterday as canola futures dropped heavily leaving cash prices down 30 cents/cwt. Flax prices were down 50 cents a bushel but sunflowers had cash prices left unchanged. Corn futures were down on the day with old crop dropping nine cents. Wheat followed lower corn prices as spring wheat finished the day down 11 cents and hard red winter wheat was down seven cents. Good harvest and crop development weather also weighed on wheat prices.
Today:
I want to let you know that at any point I will be going on maternity leave for a few weeks; so if my morning wire stops suddenly that is why. In my absence the boys will work to get information out. Grain futures are rallying today as weather has now suddenly become a major concern for the corn and soybean markets. An unexpected decline in corn and soybean crop conditions combined with a lower US dollar and speculative buying are probably also helping today's price bump, though. Currently corn and soybeans are posting double digit gains and wheat is following along pretty steadily. The US dollar is lower this morning after some unfavorable economic data and in front of a Fed statement. Other than weather there is little contributing news to the grain futures action this morning.
Spring wheat crop condition ratings dropped 2% to 70% good to excellent this week, which may be part of the reason why we're seeing higher spring wheat prices this morning. Overall, though, that is still a pretty good rating for the crop and well above last year's ratings. The top producing spring wheat state of ND has a crop rated 74% good to excellent. Winter wheat harvest is overall 67% complete which is just behind the five year average. Harvest reports out of northern states have high yields, good test weight and little VOM. Globally export competition remains pretty tough and Russia is offering out cheap wheat - US prices are not low enough to attract some demand at this point. On its own wheat has little reason to trade higher but with stronger corn and soybean markets seems to be happy to do so, especially as winter wheat harvest pressure winds down.
There is not much at all to report for the corn and soybean markets right now. Prices are higher this morning due to a decline in crop conditions and a turn in the weather forecasts. Corn is entering its key pollination stage and hot, dry weather forecasts generate some concern for the crop. So prices are higher. A 2% drop in crop condition ratings was expected by some but not by others, so the market is climbing higher. Although, a crop condition rating for corn of 66% good to excellent is not something to be too concerned over at this point. Soybean crop ratings also dropped by 2% this week to 65% good to excellent. Soybeans are still awhile away from the critical crop development stage but hot weather forecasts are helping futures trade sharply higher this morning. Tight old crop supplies and new crop worries have soybean futures up over 20 cents on some contracts this morning. General short covering/buying interest is also working to push corn and soybean prices higher.
Durum had a pretty strong price movement earlier this month and late last month, but has since started to relax. Mills needed some coverage and as planting got wrapped up, they got it. With the pickup in movement and good coverage through August, prices have relaxed a little bit. It will be interesting to see what happens with durum prices as we move forward. Canada got its acres in, but North Dakota most certainly did not. Will Canadian acres be able to cover what didn't get seeded in the US? I'm thinking so, but only time will tell.
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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