SunPrairie Grain Morning Comment
MINOT - Oct 1/13 - 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 2-5 cents, ideas that demand as strong after yesterday's USDA stocks report shows tighter stocks than expected (Mpls Dec last trade 7.35, Kansas City 7.43 ¾)
Soybeans are down 11-13 cents, USDA says there are more soybeans out there than the trade thought, harvest continues and higher yields expected (Nov last trade 12.69 ½)
Corn is 1-3 cents lower, stocks at record low but still higher than what the market expected (Dec last trade 4.39 ¼)
Sunflowers are unchanged to a nickel lower, bean oil is slightly lower this morning but may not be enough to push sunflowers lower for the time being
Canola is off 5-15 cents, futures lower with falling soybean prices
Today:
I'm back! I'm still trying to get caught up on marketing news that has taken place over the past couple of months, but I'll do my best to get some information out to you this morning! The USDA is temporarily shutdown with the government failing to reach a spending agreement. If you go to the USDA website you will see a message detailing the shutdown. After things pick back up the USDA will need a couple of days to get rolling again. This is tough because the market relies so much on USDA information, and a shutdown during corn and soybean harvest is pretty inconvenient. The last government shutdown (17 years ago) lasted about 20 days. The USDA was able to deliver us some unfavorable stocks news before the shutdown and that is having a negative impact on corn and soybean prices this morning. Little help is coming from a sharply lower US dollar.
The wheat markets are the only that saw good news from the USDA yesterday regarding stocks. Wheat consumption must be remaining pretty strong as stocks numbers came in below market expectations at 1.853 billion bushels. All wheat production, though, increased from the September estimate by 14 million bushels to a total of 2.128 billion bushels. Strong demand is probably the reason for higher wheat prices today but the market could be limited by rapidly progressing winter wheat seeding. The US winter wheat crop is 39% seeded which is only 1% behind average pace.
Soybeans are lower due to higher than expected stocks estimates and potential for yield increases in the US crop. Stocks came in at 141 million bushels, which is higher than the average market estimate of 124 million bushels. Much of the US soybean crop was planted late and there was some concern about whether or not the crop would make it with strong yields. Well, that concern seems to be waning as the absence of a frost threat allows for crop development. The increase in the crop rating by 3% this week supports that theory. Harvest is 11% complete, according to the USDA, which is behind the five year average of 20% complete.
Corn prices are falling slightly this morning, also taking cue from the USDA stocks estimate released yesterday. The USDA pegged stocks at 824 million bushels. While the current estimate is reportedly a record low, it is well above the 681 million bushel estimate that the trade was expecting to see. The crop is currently rated at 55% good to excellent and harvest is 12% complete, which is behind what the market was expecting to hear and the average pace of 23% complete.
Without the USDA information this update would have been pretty short - it could get pretty interesting for the grain markets if we do not have access to information during the shutdown.
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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