SunPrairie Grain Morning Comment
MINOT - Mar 31/14 - 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 4-7 cents lower, profit taking ahead of this morning's pair of USDA reports (Mpls May last trade 7.34, KC May 7.58 ¼)
Soybeans are down 1-4 cents, choppy overnight and early session trade, record planting intentions expected (May last trade 14.35)
Corn is 5-8 lower, following falling wheat prices, largest stocks in years expected to be reported today (May last trade 4.84)
Sunflowers are unchanged, despite falling soybean and soybean meal prices, soybean oil manages to stay unchanged/higher for now
Canola is down 10-15 cents, taking cue from soybean and crude markets, general selling pressure
The grain futures markets are quietly waiting for what the USDA has to say in its prospective plantings and quarterly stocks reports. USDA reports will be released this morning at 11 AM and traders will wait until then to make any big moves. The US dollar is lower this morning, as are crude prices. Uncertainty continues in the Black Sea Region with Russia giving no sign of withdrawing out of Ukraine.
Very few wheat surprises are expected in today's USDA reports. Stocks are expected to come in at just over a billion bushels. Spring wheat could see an increase in acres which would be pretty unfavorable for prices considering the large supplies in the US and Canada that still need to move, having a tough time doing so because of snarled rail logistics. Dryness in the US southern plains remains a concern for the hard red winter wheat crop. There is some precip in the forecast for the southern plains but until then it looks like conditions will continue to decline in the USDA's weekly crop progress reports.
The USDA is expected to report the tightest soybean stocks since 2004 in today's report. Old crop soybeans have worked their way higher on the news but new crop are sagging on the expectation for record planting intentions. The average estimate for 2014 US soybean acres is at 81.075 million and if reported would give the new crop market reason to trade defensively. Bean oil is slightly higher and meal has worked its way higher in the last few minutes as well. Canola futures could turn higher before the report but it will be interesting to see how everything finishes up.
Corn prices are taking cue from a falling wheat market. Also, the USDA is expected to release the largest stocks number in five years, adding weight to what is an already heavy market. There are thoughts that we could see some soybean acres switch over to corn, which would make 2014-5 carryout estimates surge past already pretty heavy expectations. We also need to keep in mind that speculative market participants are holding a very large long position - meaning they've bought up a lot of corn futures (pushing prices higher in the process). What is bought will eventually be sold and any sort of unfavorable market news could be enough to spur that selling pressure.
Look for a pretty quiet session until the USDA reports...
Kayla Burkhart
Broker/Procurement
SunPrairie
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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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