SunPrairie Grain Morning Comment
MINOT - Mar 13/14 - 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 4-7 cents, money continues to flow into the grain markets, pulling wheat prices higher (Mpls May last trade 7.36 ¾, KC May 7.51 ½)
Soybeans are 1-5 lower, prices back off highs, focus on Chinese cancellation news, selling continues (May last trade 13.81 ½)
Corn is down 1-3 cents, profit taking makes losses continue today (May last trade 4.87 ¾)
Sunflowers are down 5-10 cents, falling with soybean oil
Canola is up 5-10 cents, futures work their way higher just a little by finding some buying interest
*CHS Harvest for Hunger*
We are in the midst of our annual Harvest for Hunger fundraiser which began the first and runs through the 20th of this month. Each dollar donated is equivalent to four meals and all contributions are given to our local food banks. Various SunPrairie Grain locations will be having fundraisers in the coming weeks. In Minot, we are having a Chili Feed on the 19th at the new office from noon - 2:00 pm. The Chili Feed will be a free will offering with all proceeds going to the campaign. Velva is also having a Chili Feed at the elevator on the 17th from 11:00am-2:00pm. If you have already donated we greatly appreciate your contribution and support. Every dollar donated makes a difference!
Weekly export sales totals were in line with market estimates and really not very exciting at all. Grain markets are having a tough time deciding their direction this morning. Wheat prices are working their way higher and haven't looked back. However, corn and soybean futures have been all over the place this morning. In fact, in the last 15 minutes corn and soybean futures have turned from lower to now just slightly higher...perhaps they found some buying interest as the session ramps up for the day. Money continues to flow into the grain markets and that will have prices volatile and susceptible to unpredictable, downward price action...but that money flowing in is also part of the reason for the big rally we have seen over the past month or so. Ukrainian uncertainty gives the wheat market a lot of support as well. The US dollar is lower this morning and crude prices have been on both sides of unchanged.
The market is beginning to focus on the state of the US hard red winter wheat crop in the southern plains. Additionally, since temperatures have warmed up recently it makes the crop more vulnerable to cold temperatures. Dry weather in the hard red winter wheat growing areas also keeps prices on edge. Egypt may be looking to purchase some wheat again soon but with Ukrainian prices rising and European and US prices following, wheat may have just gotten too expensive for Egypt to want to purchase anything at the moment. As I said yesterday, there is no real fundamental reason for wheat prices to be this high. Global supplies are more than ample to meet demand. However, technical factors, fund buying and Ukraine are all enough to boost prices higher. There is no way to tell how long these higher prices will last or how high they will go before they fall. Take note from what has happened with soybeans these past few days...remember that these markets tend to take away higher prices a lot faster than they were given. Basis values are slipping slowly as they lost another dime in yesterday's session. Basis losses will probably continue on old crop spring wheat as rail movement goes from really, really bad to just really bad. Weekly export sales came in at 566.10 thousand metric MT(TMT), in line with estimates that ranged from 450-800 TMT.
Soybeans were struggling this morning on news that China cancelled up to 10 cargoes out of South America and is reportedly looking to cancel or delay up to 30 more. What does this say about Chinese demand for soybeans? There is chatter about China having a "glut" of soybeans at the moment as demand has slowed due to the bird flu decreasing soybean meal demand. The cancellations have negatively impacted South American soybean prices...US prices continue to climb. So it kind of makes sense that now we're hearing talk of the US importing soybeans from South America. The potential for the US to import cheaper soybeans from South America shouldn't come as a surprise considering US supplies are so tight and prices continue to climb. Globally we know there are a lot of soybeans around, it's just the fact that US supplies are tight that are keeping US prices elevated. Also, the gains the soybean market are seeing today are probably due considering the recent liquidation we've seen. Export sales for the week were better than expected at 890.4 TMT with estimates ranging from 100-675 TMT. Brazil cut their production estimate and it is lower than the current USDA production estimate.
Brazil decreased its corn production estimate as well, but it remains above the current USDA estimate. Corn prices are just slightly higher this morning, seemingly taking cue from stronger wheat and soybean prices as there is little reason for corn to trade higher on its own right now. Export sales for the week were in line with estimates that ranged from 500-1300 TMT at 787 TMT.
Look for another choppy day today. Hopefully fund buying interest is enough to pull prices higher this morning and keep soybeans from losing out yet again.
Kayla Burkhart
Broker/Procurement
SunPrairie Grain
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1800 13th 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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