SunPrairie Grain Morning Comment
MINOT - Jul 22/13 - 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 2-4 cents, US dollar is lower, expectations for spring wheat crop conditions to decline (Mpls Sept last trade 7.52 ¾, KC Sept 7.06 ¼)
Soybeans are up 5-8 cents, old crop leads the way higher as supplies are tight (Nov last trade 12.78)
Corn is down 5-7 cents, favorable weekend weather combined with good forecasts (Sept last trade 5.39)
Sunflowers are unchanged, bean oil is quiet, movement seems to be picking up which could limit gains
Canola is down 10-15 cents, futures being sold off again this morning, little is supporting that market
Friday:
Grains started the day under pressure but prices rebounded with the release of the midday weather forecasts, which called for rains to move further south than initially thought. Corn prices responded favorable to the new forecasts and finished the day with old crop prices three cents higher. Soybeans traded the day higher on tight old crop supplies and weather with nearby cash prices finishing the day up nine cents. Canola was lower, as were sunflowers. It seems the higher prices for soybeans were not enough to pull other oilseeds higher on Friday. Wheat futures were mixed - spring wheat basis fell which had cash prices down a dime, futures were nearly unchanged. Hard red winter wheat was up three cents on the day.
Today:
It looks like another mixed day for the grain markets as wheat and soybean futures are higher but corn futures are lower. Weekend weather brought rains to much of the Midwest and while they were less than expected in areas, the weather is considered mostly favorable for the crop and corn prices are struggling. Outside markets are mostly favorable with the US dollar pretty sharply lower and crude prices bouncing around either side of unchanged. There is really little fresh news for grain futures today and these markets just continue to stay focused on weather.
The wheat market is carefully watching for any additional purchases out of Egypt. Egypt will likely buy from wherever the price is cheapest in order to build its wheat stocks back up and payment is coming from loans. Despite ideas that Egypt won't buy US wheat in its upcoming purchases, demand for US wheat looks pretty good in the export front as was shown in last week's sales. Hopefully those types of numbers continue and we can see exports provide some form of underlying support to the grain futures as we move forward. The North Dakota spring wheat tour is to take place this week, beginning tomorrow. We'll be looking forward to what the tour has to say but for now the market is expecting to see spring wheat conditions decline 1-2% in this week's USDA crop conditions report. Farmers in winter wheat growing areas are reportedly taking their winter wheat to the bin, which is keeping basis values unseasonably high.
Soybeans are again seeing old crop prices lead the way higher. The August soybean contract is posting double digit gains right now, which is working to pull the November contract a nickel higher at the moment. New crop uncertainty also helps to provide some support to soybean futures. Some are expecting to see lower crop conditions reported this afternoon for the soybean market as well. Other than tight old crop supplies and uncertainty about the US new crop there really is not much happening in the way of news for soybean prices right now. Canola prices cannot even borrow strength from the soybean market any more as it seems that market just wants to find its new trading level, and keeps going lower to do so.
Corn prices are extending their recent losses today as cooler and wetter weather forecasts were realized over the weekend, which is considered a good thing for crop development at this point. However, some areas did miss out on significant rainfall, but more is in the forecast so prices are not too concerned at the moment. Some are expecting to see up to a 3% drop in crop conditions while others are expecting them to be steady/higher. So that's where we stand there.
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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