SunPrairie Grain Morning Comment
MINOT - Oct 29/13 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:45 AM CDT:
Wheat is up 1-3 cents, bouncing back after yesterday's losses (Mpls Dec last trade 7.38 ¼, KC Dec 7.52 ½)
Soybeans are 4-6 higher, buying interest found after sharply lower prices yesterday (Nov last trade 12.77)
Corn is up 0-2 cents, following stronger wheat prices, thoughts of harvest delays (Dec last trade 4.32)
Sunflowers are up 5-10 cents, stronger bean oil could mean stronger sunflower prices
Canola is up 10-15 cents, with soybeans
Grain futures finished the overnight session a bit weaker in thin, electronic trade. However, futures have worked their way higher since the start of the day session about 20 minutes ago. Outside markets are unfavorable for higher grain prices as the US dollar is higher and crude prices are down nearly 50 cents/barrel. US supplies of crude oil are increasing which is the reason for the drop in crude prices that we have been seeing lately. There will be a lot of US economic data released today and the markets will be keeping an eye on those results.
The USDA said that US winter wheat is 86% seeded, in line with what the market was expecting. Crop conditions dropped just slightly but are still rated better than what they were at this time last year. I think it's fairly safe to say that the US winter wheat crop is, overall, off to a fairly good start this year. Russian wheat farmers are reportedly hanging onto their grain, waiting for higher prices, which is causing prices to rise in Russia as supply becomes constrained. Export competition out of Canada will be pretty tough this year as Canada produced a good quality, high yielding crop.
The soybean market doesn't have much fresh to trade off of so the market is focusing on weather forecasts and harvest progress data. The USDA pegged US harvest at 77% complete, which just in line with the five year average. Yesterday's weakness is probably allowing for higher prices in today's session. Demand for US soybeans is pretty strong right now but it seems that supply is starting to match up with it. Brazilian soybeans are 34% seeded.
Corn prices have been bouncing around either side of unchanged this morning. It seems that the market is looking for its new support levels after putting in three year lows recently. Harvest pressure only adds weight to things as rapid progress was made this past week. Harvest completion jumped 20% this week to 59% done. Rains across much of the US corn producing area, though, has harvest slowed down a bit.
Railroad performance, in general, has been pretty crumby on both the major rail lines (CP and BNSF). Car placements are running late, elevators are filling up and end users are not getting their product. That is why, in general, basis values are being pretty well supported. When railroad performance improves and grain begins moving efficiently again we will probably see basis values relax a little.
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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