SunPrairie Grain Morning Comment
MINOT - Apr 22/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:30 AM CDT:
Wheat is up 1-5 cents, recovering after yesterday's heavy selloff, saying it was overdone (Mpls July last trade 7.23, KC July 7.46 ½)
Soybeans are 2-8 higher, short US stocks work (again) to pull prices higher (July last trade 14.96)
Corn is up 4-5 cents, planting progress not as good as thought, market climbs a little higher (July last trade 4.98 ½)
Sunflowers are up 0-5 cents, bean oil reluctantly follows soybeans, bean meal higher and pulls sunflowers along
Canola is up 5-10 cents, some buying interest after yesterday's selling, crude fall may limit gains
The grain futures are feeling a bit like yesterday's losses were overdone and we are seeing a little bit of a "turnaround Tuesday" in today's prices. The strong selloff yesterday could have been spurred in part by one of the world's largest commodities traders saying it's leaving the commodities business due to increasing regulation. The firm committing to exit positions could have gotten other investors excited about exiting their positions and resulted in a bit of a selloff as everyone liquidated some of their positions. Yesterday afternoon's weekly crop progress and conditions report may be lending a helping hand to prices this morning, though. Overall the market is not extremely concerned about planting delays at this point, but if things are still behind in May they will become more of a prominent concern. So we will continue to dissect every change in the weather forecasts for major crop growing areas. There is nothing new to report out of Ukraine for now.
Yesterday's sharp losses in the wheat market can be partially credited to freeze damage to the US hard red winter wheat crop being less than initially thought. Losses were probably compounded on by fund selling in general. Winter wheat crop ratings really dropped a lot over the winter as the crop went into dormancy with really good ratings and, after a rough winter, came out of dormancy looking a bit tough. Ratings, though, are pretty comparable to where they were at this time last year. That is something to keep in mind when we talk about how bad the winter wheat looks - it looked just as bad last year and they still came out with a crop. Rains are still in the forecast for the US winter wheat belt but it remains to be seen how much help the rain would actually be. Prices are a little higher this morning but could have a tough time holding onto gains.
Short stocks are again pulling old crop soybean prices higher this morning. New crop prices are up about a penny as the US is anticipating record soybean acres this year. Keeping prices in check, though, are further talks about Chinese defaulting on shipments and potentially cancelling additional shipments. Yesterday's price action was due mostly to funds selling off their long positions, which we knew was bound to happen. Soybean oil and canola prices are a little stronger this morning but gains could be limited by sharp losses in the crude oil market as those prices are down about $1.50/barrel at the moment.
Corn planting progress was reported at 6% complete, which is 8% below the five year average planting pace reported at this time. Prices are rising on the news but we should be cautious as good progress is expected this week as significant rain events are not forecast until the end of this week. Recent rainfall has been considered beneficial and is reportedly not enough to slow up progress by much, if at all. The corn market is going to be all about planting weather as we move forward.
It seems that today will see grain futures move quietly higher but yesterday's weakness does not seem to be easily forgotten.
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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