SunPrairie Grain Morning Comment
MINOT - Apr 17/14 - 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 7-11 higher, buying interest runs rampant before weekend, prices get back to levels seen earlier this week (Mpls May last trade 7.44, KC May 7.71 ½)
Soybeans are 1-5 higher, new crop gains faster than old crop as it seems the market is losing steam, focusing on South American sales (July last trade 15.10 ¼)
Corn is down 1-3 cents, market focuses on new crop production potential, which looks pretty good, prices falter (July last trade 5.01 ¼)
Sunflowers are down 5-10 cents, bean oil struggles with old crop soybean prices, canola
Canola is 10-15 cents lower, market has a tough time maintaining this week's strength, relaxes before long weekend
Grain markets are preparing for a long weekend and we're seeing some pretty mixed trade to start the day off. Corn and soybean prices are having a tough time trading higher while many wheat contracts are posting double digit gains. Grain markets and SunPrairie Grain are closed tomorrow for Good Friday. Weekly export sales might be supportive to wheat prices but a lack of exciting sales for the corn and soybean markets could be adding weight to those futures markets. Clashes continue in Russia and Ukraine but reports of interrupted exports remain to be seen.
Wheat futures are surging higher as export sales came in above market expectations and the market also assesses frost damage to the US southern plains crop. Weekly export sales were estimated to come in at 75-400 thousand metric MT(TMT) and were reported at 438.0 TMT. Tensions in Ukraine could also be supporting buying interest, but as I said above there is yet to be evidence of delayed/interrupted exports due to the unrest. Abundant global supplies combined with falling corn and soybean prices will limit wheat gains and prices are already off of their highs.
Tight US supplies are doing little to boost old crop soybean prices this morning. While US farmer selling has been quiet due to tight supplies, South American farmers have been taking advantage of price increases and selling pretty heavily. Makes sense considering it is harvest time in Brazil and Argentina as well. It is expected that some of those South American soybeans will be imported by the US to help cover for tight supplies here and keep end users up and running. Weekly export sales were dismal at 19.23 TMT, in line with estimates that ranged from -200-100 TMT.
Weather forecasts for the corn belt still look pretty favorable for planting progress and crop development. Dry areas are receiving rain and wet areas are forecast for warmer, drier weather. The market is completely focused on 2014 planting and production potential, which is why we're seeing prices fall off with improving weather forecasts. Yes, planting is slightly behind average pace, but we're still doing better than we were at this time last year and that is what the market is taking note of. Additionally, the market had built a premium into the market because of spring weather concerns, so as those concerns ease it's only natural that we're seeing prices relax too. Weekly export sales came in at 601.9 TMT, just below estimates that ranged from 625-950 TMT.
With falling corn and soybean prices it will be difficult for wheat futures to remain high, so we could see wheat give up some gains if row crops stay low. It could be a fairly quiet end to the week in front of the long weekend.
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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