SunPrairie Grain Morning Comment
MINOT - Aug 7/14 - 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 08.07.2014:
Wheat is down 3-7 cents, future have seen hefty gains since the beginning of the month, markets relax today (Mpls Sept last trade 6.37 ¾, KC Sept 6.50)
Soybeans are 1-3 lower, good rains and more on the way are leading to lower prices this morning, strong export sales may limit losses (Nov last trade 10.78 ½)
Corn is down 4-6 cents, the market is expecting a huge US crop and that overrides most bullish news that's out there for corn (Sept last trade 3.57 ¾)
Sunflowers are down 0-5 cents, bean oil is following the lower soybean futures board
Canola is unchanged, futures pretty choppy, cannot quite find market direction yet this morning
*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.
The big news today is that Russia has announced that it will not be importing agricultural commodities from countries that have imposed sanctions on Russia due to tensions with Ukraine. A list of imported goods to be banned for at least one year is being compiled. The impact that the ban will have on grain futures is tricky and not quite clear at this point. For example, if Russia bans meat imports from a country that feeds its livestock with US corn we could see demand for corn drop. On the other hand, if these tensions get worse and Russian wheat exports become more difficult this could become a "good" thing for the US wheat market. We'll just have to see how things transpire. In other news, rains continue to fall in many areas that need it and "rain makes grain" so that is putting additional pressure on the corn and soybean markets today. Weekly export sales were pretty good but futures seem are paying little attention to that.
Wheat futures are lower this morning as they back off from recent gains. The Russian ban shouldn't have a huge impact on wheat futures yet, but if things continue to be pretty ugly between Russia and Ukraine, affecting exports, wheat may start to find some strength. The market is still trying to figure out what's going on with the European quality standards and I have not heard any updates or changes yet. Weekly export sales were estimated to come in between 400-725 thousand metric MT(TMT) and they were reported at 620.9 TMT. Because weekly export sales were within the expected range they're likely to have little impact on price.
Soybeans are falling this morning as good rains fell across many growing areas and more are expected. Estimates from private analysts continue to come in above current USDA production estimates so it will be interesting to see what adjustments (if any) the USDA makes to its soybean numbers. Trade will likely be pretty mixed and choppy ahead of the reports. Today prices are lower despite very strong new crop export sales. Sales were expected to come in between 800-1600 TMT and were reported at 1103.5 TMT, with most of those sales being new crop. Old crop soybean futures are just slightly higher today but new crop futures are all lower at the moment.
Another private analyst released its 2014 US corn yield estimate at higher than the current USDA estimate. The estimate pegged US corn yield at 174.8 bushels per acre, which I'm pretty sure is the largest I've seen so far. Argentinean harvest is reportedly behind with 20% of the crop still remaining in the field, when harvest is typically wrapped up by now. Weekly export sales came in at 879.6 TMT, in line with estimates that ranged from 600-1500 TMT. As I said above, the Russian ban could be a negative factor for corn demand, but we'll have to see which products are banned before getting too excited.
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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