SunPrairie Grain Morning Comment
MINOT - Oct 14/13 - 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 down 3-5 cents, absence of fresh, supportive news has futures lower (Mpls Dec last trade 7.50 ½, KC Dec 7.55 ¾)
Soybeans are 4-6 higher, good demand keeps prices steady, gains limited by falling wheat/corn markets (Nov last trade 12.71 ½)
Corn is 0-1 higher, harvest pressure versus higher soybeans have the market confused (Dec last trade 4.33)
Sunflowers are unchanged, bean oil trade fairly quiet at the moment, demand will continue to limit gains
Canola is unchanged, Canadian markets closed today as it is Canadian Thanksgiving today
The US dollar and crude prices are lower this morning as any optimism from last week regarding the US government coming to an agreement and avoiding default is now gone. It is looking like a resolution will not be reached in time for the US debt ceiling to be raised in order to avoid default. This spurs concern about the global economy as a whole. Trade could also be pretty quiet today since it is Columbus Day. A lack of fresh news and market information will also keep prices limited. Corn and soybean harvest delays are expected this week due to rain events which could limit harvest pressure in the futures markets.
Wheat prices are lower as there is no news to give price direction otherwise. There is chatter about improving Australian wheat crop conditions which will limit gains in the market. However, we're also still a bit concerned about Russian and Argentinean production prospects. If production is lower, exports will likely be lower and that will create more demand for US wheat. However, that's a big "if" and only time will tell if that becomes reality. A fast US corn harvest could result in speedy winter wheat seedings in areas, leading to a bigger crop and putting pressure on prices. The market could use some fundamental news and figures to trade off of.
Strong demand for soybeans keeps prices higher, even with harvest pressure around. There are hopes for an increase in Chinese purchases as we move forward, however they do already have some big purchases on the book. The market was expecting to see some hedge selling today due to weekend harvest but that doesn't seem to be the case this morning as futures are nearly a dime higher at the moment. The USDA isn't reporting its weekly crop progress information but the market is estimating soybean harvest at about 40% complete nationwide.
Corn prices are struggling this morning as the market is digesting a big crop with little export demand. Falling wheat prices are working against higher soybean prices in the corn market today and it seems that higher soybean prices are winning as corn has now worked its way to nearly two cents higher after finishing the overnight session lower. The USDA, if open, would probably peg US corn harvest at about 30% complete this week. Export demand for US corn is weak but domestic demand seems fairly strong.
An absence of news from the USDA makes it pretty difficult to keep fresh news in the marketplace. The USDA monthly S&D report that was scheduled to be released last Friday is expected to be "combined" with the November report, assuming that the government is no longer shut down at that point and time.
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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