SunPrairie Grain Morning Comment
MINOT - May 29/14 - 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 down 1-5 cents, after trading higher in the overnight session, wheat falters and heads lower (Mpls July last trade 7.15 ¼, KC July 7.32 ¾)
Soybeans are -2 to +1, old crop lower and new crop higher, which doesn't make sense given tight OC supplies and rapid NC planting (July 14.97 ½)
Corn is down 4-6 cents, technical pressure and mostly favorable planting/crop conditions (July last trade 4.67 ¼)
Sunflowers are down 0-5 cents, bean oil slightly lower with confused soybean board, canola prices
Canola is 5-10 lower, futures a bit lower after decent progress yesterday
It's another quiet start for the grain futures this morning as a lack of fresh news leaves prices directionless. The US dollar is lower and crude prices are higher due to a decline in US gas stocks. A Ukrainian helicopter was shot down by Russian separatists, killing fourteen, reminding us that the struggle there is not yet over despite recent Ukrainian elections and statements of cooperation from Putin. The market is talking about planting delays in North Dakota and what changes to expect in corn/soybean acres.
The wheat futures were all seeing a little bounce this morning, which is newsworthy in itself as we have not seen one for awhile. However, futures were unable to hold higher prices and have turned lower. Southern plains harvest of the hard red winter wheat crop could be providing some pressure, even though there is very little information regarding quality. As harvest progresses through the weekend we should hear more. Adding weight to ideas of abundant global supplies are reports of higher estimates for the Russian wheat harvest this year. The US may have a small hard red winter wheat crop and late spring wheat planting season, but globally there is a lot of wheat around which creates little concern for supply.
Tight old crop supplies are really working pretty hard to keep prices higher, but in the wake of a large new crop and falling wheat and corn prices, it's hard for soybean futures to trade higher. More soybean acres in the northern plains due to late planting preventing corn from going in could weigh on new crop prices as well. The market is still uncertain about whether we'll make it to new crop with the amount of old crop supplies on hand and that will keep prices supported. However, there are a lot of soybeans going in all over the US this year and that will most definitely limit gains and put pressure on new crop prices. Keep an eye on soybean prices. There is a large inverse between old crop and new crop (meaning old crop prices are higher than new crop - about $2.50 higher, that is) and it is not likely that new crop prices will rise to meet old crop. Many producers will likely wait until they are finished planting to start contracting new crop soybeans, at that time I anticipate some pressure in the soybean market as selling picks up and the market assesses the amount of acres planted.
Corn futures are lower this morning as technical pressure just lets prices drift lower. There are certainly some problem areas for corn but overall there's a pretty favorable outlook for the US corn crop so far this year. The market is watching the northern plains, North Dakota specifically, to see how planting goes and if any further delays are experienced. As I mentioned above, a switch to soybean acres could occur which would provide some strength to the corn market. A recurring pig virus found on an Indiana farm has generated some concern about long term feed demand, which could be partially responsible for today's lower prices.
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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