SunPrairie Grain Morning Comment
MINOT - May 12/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:50 AM CDT:
Wheat is 15-18 lower, selling pressure due in part to lack of favorable news from the USDA (Mpls July last trade 7.80 ¼, KC July 8.11 ¾)
Soybeans are down 10-12 cents, USDA increases imports, estimates record large global stocks for 2014-15 (July last trade 14.76 ¼)
Corn is 7-9 lower, continue Friday's selloff, USDA keeps yield estimate with trend, planting concerns ease (July last trade 4.99 ½)
Sunflowers are unchanged, bean oil holding up despite sharp losses in soybean and canola futures
Canola is down 20-25 cents, likely profit taking as market corrects its way lower
It seems that USDA report pressure from Friday is continuing into today's trading session. The report Friday was not overly unfavorable...but it didn't provide any surprises to help futures trade higher, either. Ukraine is still a market factor and issues there could provide some support to prices as we move forward. The dollar is correcting lower this morning after trading higher Thursday and Friday. Crude prices are up about 65 cents/barrel.
Rains fell to some areas of the US hard red winter wheat belt recently which could be part of the reason for sharply lower prices this morning. Crop conditions are expected to decline again in this afternoon's weekly crop progress report but even that news is not helping out prices this morning. It seems the market is focused more on the increase in global supplies that came from the USDA on Friday. Despite crop concerns global wheat supplies remain ample enough to meet demand and when looking at the big picture, there is little reason for wheat prices to be so high. US ending stocks for 2013-14 remained unchanged at 583 million bushels and news from the USDA was pretty uneventful. US ending stocks for 2014-15 are expected to be a bit lower at 540 millbu.
Soybean prices are showing double digit losses this morning. The USDA noted an increase in imports in its report Friday but there was a larger increase in exports which worked to decrease ending stocks from 135 millbu to 130 millbu. However, 2014-15 US soybean stocks jumped to 330 millbu and global ending stocks estimates jump to record numbers. The USDA estimates 2014-15 yield at 45.2 bpa, up from this year's 43.3 bpa. Sunflower prices are holding up this morning against sharply lower canola and soybean futures - so watch for falling prices there as well.
Corn futures are continuing Friday's selling pressure which was spurred in part by the USDA leaving 2014-15 yield estimates at trend levels of 165.3 bpa (versus 158.8 bpa for the 2013-14 crop). Old crop ending stocks declined from 1.331 billbu to 1.146 billbu. However, new crop ending stocks are estimated at a robust 1.726 billbu despite a decline of nearly four million planted acres expected from last year. The high yield indicates that the USDA is not necessarily concerned about planting progress. This week's report (expected to put progress as high as 60% complete) will help us feel out planting delays. Some spots of the corn belt received some rainfall which could delay weather but long term forecasts look good for crop development.
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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