SunPrairie Grain Morning Comment
MINOT - Aug 27/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 9:00 AM CDT 08.27.2014:
Wheat is up 0-2 cents, little fundamental reason, likely some buying interest after this week's downward momentum (Mpls Sept last trade 6.12, KC Sept 6.24)
Soybeans are 1-3 cents higher, buying spurred so some make profits after heavy selling at higher prices (Nov last trade 10.29 ½)
Corn is down 1-3 cents, chatter of big yields continues and that keeps prices headed lower (Sept last trade 3.54)
Sunflowers are unchanged, little action in the soybean oil market this morning, keeping sunflower prices unchanged
Canola is up 0-5 cents, futures board a little higher this morning, weather concerns support prices
Movement in the grain futures markets is pretty uneventful this morning as prices are chopping around. Soybeans and wheat are slightly higher while corn is just a little bit lower. Favorable US crop weather continues to be the main factor when it comes to prices, which makes markets think yields are higher than estimated and keeps futures from wanting to trade higher at all. There's little demand news to report and what's out there isn't very good anyway. The US dollar is lower this morning and crude prices are just a little bit higher.
The talks between Russia and Ukraine are being watched pretty heavily by the markets. There has not been any resolution reported as of yet to the conflict but talks are going and conversation is flowing, which is a step in the right direction. As expected, Egypt skipped over purchasing US wheat and sourced from Russia and Romania. Taiwan also passed on some US wheat, citing high prices. So US wheat is overpriced in the export market and harvest is coming, nothing about either of those things tell me that prices should trade higher at the moment. We will, though, be keeping an eye on harvest weather and crop quality out of Montana and North Dakota.
Early soybean harvest has begun in the far southern US and, as expected, yields are high. Old crop prices are beginning to relax and basis values are falling as we get closer and closer to having new crop soybeans in the bin. Some reports of Sudden Death Syndrome (SDS - can be caused by excessive rainfall) have come out of the Midwest (Iowa/Nebraska) and that has futures a little higher today, especially when coupled with buying interest before the long weekend after strong, recent selling pressure. The market is already talking about potential acreage increases in the US and South America for 2015. Not really a shocker if corn prices continue to stay relatively low.
Canola futures have managed to hang onto some strength recently while other prices have been falling off. Canola sold off pretty heavily over the spring/early summer and now the market is feeling like perhaps too much was taken out of prices. Additionally, weather concerns due to excessive moisture have the market worrying about the crop that is sitting out in the field. Chatter about early frost is also concerning for some of the canola crop. These factors seem enough, for now, to keep prices supported.
Large yield expectations for the US corn crop continue to push prices downward. Like US wheat, US corn is also getting bypassed in the global export marketplace, which only lets prices drift even lower. Prices will probably continue to work their way lower toward and through harvest unless something completely unexpected happens. Also, at some point I'd hope that prices will get low enough to spur some demand.
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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