SunPrairie Grain Morning Comment
MINOT - Aug 26/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 9:05 AM CDT 08.26.2014:
Wheat is 8-11 lower, US wheat not competitive in global marketplace, sags with corn and beans (Mpls Sept last trade 6.05 ¼, KC Sept 6.16 ¼)
Soybeans are 6-8 lower, crop condition ratings are the best in decade, the November futures contract saw a new low in the overnight session (Nov last trade 10.22)
Corn is 4-6 lower, good European corn yields expected, US crop ratings are high (Dec last trade 3.62 ¾)
Sunflowers are down 0-5 cents, bean oil is slightly lower this morning with lower soybean and soybean meal futures
Canola is unchanged, futures board fairly quiet after yesterday's gains
Crude futures are shooting higher this morning as the US dollar sags. Usually these conditions are favorable for higher grain prices, but that is not the case this morning. Grain futures are lower again this morning as there is little fundamental reason for prices to trade higher. A meeting between the Russian and Ukrainian presidents could work to ease concerns about further conflict between the two countries. Great crop ratings have the corn and bean markets sinking but chatter of an early frost in areas could start providing support at some point. Markets are closed Monday for the Labor Day holiday.
Egypt's main wheat buyer is back and looking for wheat for the first time since the beginning of the summer and that has the wheat market chattering about demand. However, US wheat is expected to be skipped over as Russian wheat is much cheaper. There was a story released about France buying milling wheat from other countries and blending it with their poorer quality wheat...the story spurred a large French buyer to state that they will not accept grain that is not of French origin. A slow start to spring wheat harvest and concerns about crop quality are popping up here and there but the market impact at the moment is nonexistent.
Soybean crop conditions declined by 1% to 70% good to excellent, but are still at historically high levels. The high crop ratings have some increasing their yield estimates and an upward revision to USDA estimates is expected in future reports. With an expectation for higher yield we are seeing a pretty good drop in prices as the November contract hit new lows in the overnight session, bouncing back a little bit now in the day session off of those lows. Unless something completely devastating happens to the crop I think we can count on lower prices into harvest.
As with soybeans, the US corn market can likely expect to see upward yield revisions as we move forward. Early yields out of the US delta region are reported at 200+ bushels per acre. The EU is expected to see higher yields as well - those timely rains that impacted wheat quality helped to boost corn yield and have that crop looking pretty good. Ukrainian yields are expected to be a bit lower than estimates, though, as dry weather may have cut production a bit. US crop ratings are at 73% good to excellent which is a 1% increase from last week's ratings.
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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