SunPrairie Grain Morning Comment
MINOT - Jul 19/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:35 AM CDT:
Wheat is -1-+1, mixed corn and soybean markets, decent global demand versus large supply potential (Mpls Sept last trade 7.50 ½, KC Sept 7.02)
Soybeans are -1-+2, November futures struggle with good weather forecasts and crop potential while tight old crop supplies boost that market (Nov last trade 12.65 ¼)
Corn is down 4-6 cents, favorable weather forecasts and tough global export competition (Sept last trade 5.40 ¼)
Sunflowers are unchanged, despite stronger soybean meal and soybean prices, soybean oil prices are pretty close to unchanged today, making for an uneventful day for flowers
Canola is down 5-10 cents, futures sell off continues with strong new crop production potential
Yesterday:
A higher US dollar combined with cooler, wetter forecast for major US corn and soybean growing areas pushed futures lower for yet another day in a row. Soybeans found additional weakness from what looked like profit taking and cash prices finished the day down 18 cents. Other oilseeds followed weakness from soybeans and sunflowers were down a dime while canola was down another 30 cents/cwt. Corn futures chopped around but eventually finished the day with a three cent gain. Export sales for corn for the week were pretty strong, but already factored into the market and thus had little impact on prices. Spring wheat drifted lower with futures losing five cents and basis losing five cents as well, pushing cash prices down a dime. Hard red winter wheat finished the day unchanged. Wheat export sales for the week were pretty strong but weakness in the row crops kept wheat from gaining.
Today:
Grain futures are again mixed this morning with corn prices weaker, soybeans choppy and wheat prices mixed. The US dollar is lower and crude has turned from higher to lower, so it's tough to say what kind of impact outside markets may have on grain futures today. It seems the US dollar is relaxing after yesterday's gains. Other than outside markets grain futures are focused on, you guessed it, weather. Weather was hot and dry for much of the US growing area this week but are expected to turn cooler and wet beginning this weekend, which is considered a good thing for the crop.
Egypt, as expected, bought Black Sea region wheat as it was the cheapest option. Global demand is expected to be quite strong this year, but so is the competition in the export market. There are some who are forecasting a smaller Australian crop this year which could limit some sales out of that country, though. Argentina is expected to ramp up wheat production pretty heavily this year. China is continuing to be a pretty steady buyer of wheat which could be encouraging for prices. Overall though things are fairly quiet in the wheat markets. Winter wheat harvest is slightly behind average pace which could keep that market supported also. Spring wheat crop conditions will limit gains in that market. It looks like it's going to be a pretty quiet finish to the week.
Corn and soybean crop conditions are expected to fall another percent or two in Monday afternoon's weekly USDA crop conditions report. The drop is expected because of this week's hot and dry weather. If cooler forecasts are realized we could see conditions stabilize as we move forward. Ratings are still pretty good, though, as they're in the mid sixties for good/excellent for both corn and soybeans. Old crop soybean prices are being pulled higher by soybean meal as supplies are getting tight. August soybean meal and soybean prices have seen pretty strong gains recently. However, we're bid over the November contract for soybeans which is not posting as solid of gains due to the large crop prospects in the US. Like wheat, global competition remains stiff in the corn export market. South Korea is reportedly snubbing the US for corn, seeking cheaper supplies from the Black Sea region or even South Africa. Corn prices are down about six cents this morning as there's little to keep prices higher at the moment.
Things could be pretty choppy this morning and we could see some changes as midday weather models are released, assuming there are some surprises or changes.
Have a good weekend!
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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