SunPrairie Grain Morning Comment
MINOT - Aug 6/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:45 AM CDT 08.06.2014:
Wheat is up 4-7 cents, increased tension out of Russia and Ukraine sparks futures prices (Mpls Sept last trade 6.33 ¾, KC Sept 6.47 ½)
Soybeans are 2-4 lower, timely rains to key growing areas support large crop estimates (Nov last trade 10.63 ½)
Corn is up 0-2 cents, following wheat futures, corn has little fundamental reason on its own to trade higher (Sept last trade 3.57 ½)
Sunflowers are unchanged, bean oil action is fairly quiet with the small drop in soybean and soybean meal futures, leaving sunflower prices untouched for now
Canola is down 0-5 cents, futures just a bit lower with selling pressure in the soybean complex
*Minot Main Mandatory Maintenance - - DATE CHANGE*
Work is going ahead of schedule so we have a change in our closure dates. The Minot Main Plant will be closed August 7th with plans to re-open the week of the 18th for maintenance required for OSHA compliance. We still plan to take winter wheat at our Minot West Plant (sunflower house on Valley Street). Thank you for your continued support and please call if you have any questions or concerns.
Grain futures are mixed this morning with soybeans continuing their downward momentum and corn and wheat futures trading higher. Fresh tensions out of Russia and Ukraine are providing some support to the futures markets. The US dollar is higher this morning as investors pull money from stocks and put it into the dollar. Crude prices are higher this morning as well as another decline in US stocks is expected. Chatter is picking up about next week's USDA reports so trade could be choppy until their release on Tuesday morning as new estimates for what the USDA might say are released daily.
A private market analyst expects the USDA to decrease its US wheat number in Tuesday's report which would be favorable for prices if it happened. Today's strength, though, is due mostly to fresh tension out of Russia and Ukraine. Yes, they have a huge crop coming out of there, but increased sanctions on Russia and ongoing problems between the two countries could limit export progress and that spurs hope for increased demand for US wheat. Also getting the market excited about US demand is the whole situation out of Europe where a lot of wheat is being produced but a higher amount of it will be low quality due to untimely rains during harvest. However, end users tend to learn how to work with what they're given and I'm hearing talk about changes in quality standards for milling wheat in Europe that would result in less wheat being dumped into the feed market and more milling supply being available. Technical buying interest may also be spurring higher prices this morning.
Well there is not a whole lot of news to report for soybeans today but the news that is out there is not terribly favorable. Rains fell over some key growing areas of Iowa, South Dakota and Nebraska, making that phrase "ideal conditions" prominent in soybean news today. Additionally, there are additional rains in the forecast so it seems like we're worrying less and less about the dry conditions that were all the chatter earlier this week. Prices, though, have turned to the positive since I began writing, likely being pulled higher by corn, wheat and crude futures.
There are some expectations that the USDA will put US corn yield at 168 bushels per acre in Tuesday's report...but that is about four bushels per acre below other estimates we've read about recently. Thoughts that the USDA is overestimated on demand for US corn do not bode well for the market, either. There are several factors that indicate demand for US corn could be overestimated, those factors include a larger than expected crop out of Brazil, rapid Black Sea Region exports and increasing feed wheat supply. For today, though, corn futures will turn to the wheat markets for guidance and today wheat prices are higher, so we will take gains in the corn market wherever we can get them.
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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