SunPrairie Grain Morning Comment
MINOT - Oct 17/13 - 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 up 4-7 cents, lower US dollar pushes grain futures higher, market recovers from yesterday's losses (Mpls Dec last trade 7.47, KC Dec 7.49 ¼)
Soybeans are 3-7 higher, strong export demand and light farmer selling boost prices (Nov last trade 12.85)
Corn is up 2-4 cents, reports of China buying US corn have the futures market excited (Dec last trade 4.46 ½)
Sunflowers are 0-5 higher, bean oil stronger with soybeans
Canola is up 10-15 cents, with rising soybean complex, general market optimism
The US government managed to make a short term deal and today the government is up and running again. The US dollar and stocks were initially higher on the news and anticipation of the deal. However, today the dollar is sharply lower as the details of the nature of the deal are learned. Because the "solution" is only a temporary one, optimism has left the market for now. The USDA website is still down this morning, likely resuming next week as the agency needs some time to get back on its feet and information gathered. There will be an announcement tomorrow regarding the October crop report and whether that will be released this month or combined with the November report which is to be released Friday the eighth. Crude prices are down over a dollar per barrel this morning on a larger than expected US stocks estimate. Crude prices are still hovering over $100/barrel though.
Exports for US grains are expected to be quite strong when the USDA releases its estimates. The market thinks that wheat exports were pretty good over these past few weeks - the question is now whether or not the market can hang onto that demand as we move forward. That could be pretty tough to do considering the large Canadian crop and overall ample global supply. Today's support is probably coming from a lower US dollar and higher corn prices more than anything.
Strong export demand is also working to push soybean prices this morning as the November contract is showing double digit gains at the moment. Chinese demand is reportedly pretty strong, even after the government sold off some of its state reserves. US farmer selling remains pretty light, even with harvest wrapping up in some areas. There is still nearly half of harvest remaining but harvest pressure really has not been that prevalent this year as beans have been staying on farm instead of heading to town in many areas.
China announced that it purchased US corn recently, working to make futures trade higher this morning. Harvest is still delayed in many areas which also allows for higher prices. The US has a huge crop coming, there's no doubt about that, but it is just hitting the market a little later because of the wet weather. Basis and futures values are well supported with the delay in harvest, but once it really gets rolling prices will likely succumb to harvest pressure. We also need to keep in mind what the USDA will say when it releases estimates. It is more than likely that we will see upward revisions to US corn and soybean crop estimates. However, the strong demand that we have seen recently may get factored into export estimates which may counterbalance some of the increase in production.
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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