SunPrairie Grain Morning Comment
MINOT - May 6/14 - 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 -3 to +2, HRW wheat gains on poor weather, other markets fall with row crop weakness (Mpls July last trade 7.87 ¾, KC July 8.31)
Soybeans are down 9-17 cents, old crop heavily lower on US importing Brazilian beans meant for China (July last trade 14.48)
Corn is 2-5 lower, export sales cancellations reported this morning, planting rapid this week before further rains to corn belt (July last trade 5.04)
Sunflowers are unchanged, bean oil losses not significant, a surprise considering soybean and canola prices being sharply lower
Canola is down 20-30 cents, StatsCan reports record canola stocks, sparks selling pressure in canola futures
Grain futures are mostly lower this morning with hard red winter wheat futures being the exception, trying to trade higher due to concerns about crop conditions. The US dollar is lower this morning and crude prices are about 40 cents/barrel higher. There could be some worries generating from poor global economic growth numbers. However, the grain futures seem to be focused on other things. Friday the USDA will release its monthly S&D report.
The hard red winter wheat market is focusing on hot, dry weather conditions that are causing some crop problems. This has shifted traders' attention from Ukraine for the time being. Ukrainian exports reportedly decreased in April from March...many believe that is due more to supply issues than political problems. Losses in the other wheat markets and row crops could prevent the HRW market from sustaining early strength, though. Winter wheat crop condition ratings dropped again to 31% good to excellent (33% last week) but ratings are pretty well in line with where they were last year at this time - at 32% good to excellent. The poor to very poor ratings are at 38% this year, less than last year's 39% poor/very poor.
Old crop soybeans are being driven sharply lower this morning as the market focuses more and more on the decline in Chinese imports and how that is making for an increase in US imports. The USDA is expected to increase its estimate for US imports in its monthly report on Friday which would in turn help ease up on the tight ending stocks number that is estimated for this year. New crop prices are falling on ideas that the 2014-15 carryout could be nearly double this year's. Of course, ending stocks depend on planting progress...the market was expecting to see soybeans at 8% planted but the USDA pegged us at 5% complete, which is 6% below the five year average.
Statistics Canada released a report yesterday that said there are record canola stocks on hand. This is not really a surprise given last year's high production and the fact that rail logistics have resulted in much of the crop sitting on farm rather than being sold. The market, though, is reacting by selling off futures pretty heavily as it comes to term with the fact that Canada still has a lot of canola yet to move.
There were some corn export sales cancellations reported this morning which seems to be just adding weight to corn futures so far this morning. Planting progress was expected to be as high as 33% complete in yesterday afternoon's report but was reported at 29% complete, which is well below the 42% average. However, last year's planting progress at this time was only 11% complete, which I feel is something we need to keep in mind. While planting is indeed behind, it does not yet seem far enough behind for many to expect the USDA to decrease its yield estimate for this year's crop. Also, Illinois' progress is ahead of the average pace and good progress is expected to be made this week before rains hit many corn growing areas again.
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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