SunPrairie Grain Morning Comment
MINOT - Jul 31/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:30 AM CDT:
Wheat is mixed, Minneapolis lower with large crop prospects, KC less than a penny higher (Mpls Sept last trade 7.35 ½, KC Sept 6.97 ¼)
Soybeans are up 0-2 cents, speculators continue to get their positions squared away in front of month end (Nov last trade 12.04 ¼)
Corn is 1-3 lower, large US production potential and an absence of a weather threat have futures lower this morning (Sept last trade 4.97 ½)
Sunflowers are 0-5 higher, soybean oil catching a break and finally trading a little higher this morning but strong movement could limit gains
Canola is unchanged, futures trying to trade higher with soybeans but strong production prospects limit gains
Today:
There is very little fresh news for the grain markets this morning and futures are trading accordingly. It has been a fairly quiet start to the session and the overnight was no better as it did not provide much excitement either. Yesterday's little "bounce" for the wheat and corn markets is doing little today and soybeans are mixed, having a tough time recovering from yesterday's losses. Outside markets are providing little direction as well. A Fed statement is coming later today and outside markets are waiting for any big moves until then. The US dollar is higher and crude prices are up about 25 cents/barrel.
Winter wheat prices are higher this morning but spring wheat prices are struggling a little. Potential for a large US corn crop could be keeping a lid on wheat prices this morning as the two crops work together as substitutes in the feed market. Also limiting gains are potential for a large Canadian crop and US spring wheat harvest starting soon. US exports have been good so far this year but the market is starting to question whether current levels are sustainable. This seems to be a valid point when the market talks about Egypt purchasing wheat from the Black Sea Region and Australia selling to China. There is going to be a lot of export competition this year as the global crop as a whole is looking pretty good.
Speculative position evening has the soybean market bouncing around this morning. Since I started writing about 15 minutes ago the soybean market has traded both sides of unchanged and back. The market is not concerned for now about US weather and thoughts are that production will overall be pretty good from the US this year. Chatter about the 2014 South American crop has already begun as private analysts think that Brazil could have record production next year as acres are thought to increase. Bean oil and canola prices are a little higher this morning which may keep sunflower and canola prices from losing additional ground today.
Corn prices are pretty solidly lower this morning with the exception of the September contract which is higher as the old crop market is working with tight supplies. When you combine large US production potential with a lack of a weather threat it makes for lower corn prices, which is what we're seeing today. It seems that yesterday's little "bounce" is doing little to support higher prices today. US weather looks ok for now and the market is chattering a bit more about dryness in some areas. Despite little precipitation in the nearby forecast prices are lower because the 6-10 day is calling for above normal precip to many of the dry areas. Lower new crop prices have definitely helped out US demand but buyers feel that there is potential for prices to work their way even lower, which may keep them on the sidelines for the time being. We also need to watch for export competition from the Black Sea Region and Brazil as those countries seem to have more willing sellers than the US.
All in all it looks to be a pretty quiet day for the grain markets again. When you're in a weather market, and the weather isn't doing anything, it makes for uneventful trade.
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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