SunPrairie Grain Morning Comment
MINOT - Aug 4/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:55 AM CDT 08.04.2014:
Wheat is 5-9 higher, following strength in row crops, European crop quality problems (Mpls Sept last trade 6.26 ¼, KC Sept 6.43 ¼)
Soybeans are up 16-18 cents, rains over the weekend were not enough to ease dryness concerns (Nov last trade 10.75)
Corn is 3-5 higher, soybean strength, moisture concerns (Sept last trade 3.57 ½)
Sunflowers are up 0-5 cents, bean oil following soybean and soybean meal strength
Canola market is closed today due to a Canadian holiday
Grain futures are higher this morning as we're in a weather market and things are getting a little dry right now, especially for soybeans which are leading the way higher. Long term forecasts are a bit drier which are helping to boost futures prices. Additionally, the dry weather has many believing that crop condition ratings will decrease a bit and has also spurred some buying interest. We need to keep in mind, though, that crop ratings even if they decline will still be far above average. The US dollar is higher this morning and crude is up about 10 cents a barrel as there is not much fresh news for that market.
Wheat prices are shooting higher this morning with little fresh, favorable news to justify higher prices. There are some concerns about European crop quality as rains have really hurt harvest progress and quality on the wheat that has yet to be harvested. Russian exports have reportedly been very strong, however their production estimates continue to increase as well. Canada extended its mandate on its railroads to haul a minimum amount of grain per week, which is good news for them but not so much for us as it prevents railcars from the Canadian Pacific Railroad from getting to US elevators. The good news is that railcar shortages help to keep basis values supported.
Soybeans stand to gain the most right now from dry weather threats. Rains over the weekend did not help to ease concerns about dryness and the extended forecast calls for little rain over much of the US growing areas. We could see crop conditions fall, but they will likely remain quite strong compared to ratings of the past. Private analysts have estimated soybean yield at pretty close to 46 bushels per acre, so the market will have to remain focused on the potential for a large crop. Optimism about Chinese demand could also be working to push prices higher this morning. Things look good for the oilseed markets with bean oil and crude prices higher this morning as well.
The dry weather concerns are not huge for the corn market as much of the US corn crop has already passed the key pollination stage. The market is expecting to see conditions decline in this afternoon's crop progress report but that's typical after pollination. As with soybeans, corn crop conditions will likely remain well above average and the market should continue to focus on the crop that's coming. Private analysts have pegged US corn yield north of 172 bushels per acre, which is well above current USDA estimates. Today it seems that corn is finding its direction from the soybean market.
Kayla Burkhart
Broker/Procurement
CHS SunPrairie
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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