SunPrairie Grain Morning Comment
MINOT - Aug 2/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:25 AM CDT:
Wheat is up 1-3 cents, thoughts that perhaps the winter wheat markets have put in their harvest lows, spring wheat follows (Mpls Sept last trade 7.43 ¼, KC Sept 7.08 ¾)
Soybeans are 3-6 higher, hopefully the market can maintain the buying interest found today (Nov last trade 11.98 ½)
Corn is 1-3 lower, mostly favorable US and global weather forecasts continues to put downward pressure on futures prices (Sept last trade 4.85)
Sunflowers are up 0-5 cents, bean oil strength may throw sunflowers another bone today
Canola is 15-20 higher, short covering continues, lack of farmer selling also supports prices
This will be my last morning grain update before I begin my maternity leave on Monday, August 5th. In my absence the boys will work to get information out, especially as we near and progress through harvest.
Yesterday:
Not much happened in the grain futures markets yesterday but I thought I should talk a little bit about what happened with all of our cash prices since I'm sure there are questions. Corn, soybean, spring wheat and hard red winter wheat basis values rolled from the July to August with the change in the months yesterday. August basis bids were lower than July bids, especially for wheat as the markets near harvest. With that roll we saw spring wheat prices drop a nickel and hard red winter wheat prices drop 35 cents. Corn and soybeans were also hit pretty hard as soybean bids rolled to match new crop values and corn basis dropped 50 cents. This had soybeans down 94 cents yesterday and corn off 62 cents. So it was not the futures markets that hurt cash prices yesterday, it was the cash markets. Flax prices have been falling steadily as Canada looks to be producing a good sized crop. Offers for Canadian flax will likely be lower than offers for US flax, so buyers will keep bids low since they can buy cheap Canadian flax. Feed barley prices were sharply lower yesterday as the market competes with new crop wheat and potential for a large US corn crop which will also compete in the feed market. Canola was higher with bean oil and crude prices.
Today:
Grain markets are mixed as the corn market continues to see weakness due to US weather forecasts. Soybeans look to have some buying interest this morning, which hopefully futures can maintain as they have been struggling to doe. Wheat markets are higher with buying interest and ideas that perhaps the winter wheat futures have seen their harvest lows. US stock markets have been pretty exciting lately as the DOW and S&P closed at record highs yesterday and look to climb higher again today. The US dollar is lower after climbing higher yesterday, as are crude prices. Grain futures are simply waiting for something exciting to happen with US weather before making any major moves.
There is little happening for wheat prices this morning and it seems that the little bit of buying interest that we're seeing today is enough to push prices about a nickel higher. Despite ongoing winter wheat harvest, futures are climbing higher bit by bit. Have we seen futures put in their harvest lows for the winter wheat markets? Tough to say but recent price action is encouraging. Spring wheat could be a different story, though, especially considering that the Saskatchewan spring wheat crop is rated at 84% good to excellent. Canada looks to have a pretty good spring wheat crop and US ratings are not too shabby, either. Talk of dryness to western Australia seems to be gaining strength and there are ideas that the crop could really be hit a bit hard by the weather.
Soybeans are working their way higher and let's just hope that prices can maintain this buying interest, as they have been unable to do so in the past. Light volume with this buying we're seeing today also works to push prices higher as there are few sellers to push prices down. Fundamentally there is little fresh news to guide soybean prices today and they're really at the mercy of what the funds would like to see happen. Canola futures are sharply higher again this morning, which is encouraging after the recent downslide we have seen in futures prices for that market. A lower Canadian dollar, higher crude prices, lack of farmer selling and short covering are working together to give this market some strength. Hopefully we have found our low but a large Canadian crop (19.75 million acres worth) will keep buying interest limited to an extent.
The corn market is bouncing around either side of unchanged, finishing the overnight session lower but starting the day session about a penny higher. The market continues to focus on US weather and how it will impact production potential. Going into the weekend, forecasts are calling for above normal precipitation and below normal temperatures to most of the US corn growing areas. These forecast conditions are pretty dang good for pollination and if realized will only strengthen ideas regarding large US crop production potential. Mild global weather, favorable for the global crop, is also weighing on things. A private market analyst yesterday came out with its most recent estimates of the US crop, which were just slightly higher than the current USDA estimates. The analyst pegged US yield at 157 bpa and total production at 13.993 billion bushels. USDA total production is currently estimated at 13.95 billion bushels.
I wish you all a safe harvest and I'll be back in time for corn, soybeans and sunflowers!
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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