SunPrairie Grain Morning Comment
MINOT - Aug 29/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:25 AM CDT 08.29.2014:
Wheat is up 2-5 cents, Black Sea Region uncertainty as tension between Russia and Ukraine gets worse (Mpls Sept last trade 6.20, KC Sept 6.36 ½)
Soybeans are 2-4 higher, Chinese demand really works to boost old crop prices and new crop follow along (Nov last trade 10.31)
Corn is down 1-3 cents, the market knows a huge crop is coming and a lack of demand news lets futures drift lower (Sept last trade 3.60 ¼)
Sunflowers are unchanged, soybean oil movement is quiet yet again, likely leaving sunflowers unchanged for now
Canola is unchanged, futures board fairly quiet after this week's gains
Grain futures are mixed this morning with the wheat and soybean boards higher and corn futures slightly lower. Overnight trade was fairly quiet and it looks like that could continue into the day session ahead of the long weekend. Futures markets are closed Monday as well as the CHS SunPrairie offices so there will not be a morning grain update that day. The US dollar is slightly higher this morning and crude futures are up about 73 cents/barrel at the moment. The grain markets are trading the same news they have been trading over the past couple of weeks and there really is not a whole lot of fresh news to report.
Wheat futures are finding strength this morning as it looks more and more like a war between Russia and Ukraine. Russian president Vladimir Putin accused Ukraine and its western backers of using the peace talks as a diversion to get the pro-Russian separatists out of Ukraine. Despite the conflict, though, Ukrainian harvest is ahead of pace with a huge crop coming off. Now Ukraine just needs to be able to export it, which is where the hang up could be. Other concerns out there for wheat are dryness in Australia and excessive moisture in Argentina. France is pretty much done with harvesting their crop which had excessive rains at harvest time, now the market will start looking at quality problems and figuring out how much milling wheat was lost due to the rains.
Tight old crop supplies are working to bump up old crop soybean futures this morning and new crop futures are just barely tagging along. The new crop soybean market is well aware that yields are increasing with favorable rains and that production estimates will likely have to increase soon. The disease that is popping up in areas is not thought to have a huge impact on total US production at this point. There are some ideas that futures are a little bit oversold for now and making a slight correction upwards. However, the market is likely still in a downward movement and this is just a little uptick as markets trend lower. Strong Chinese demand could also work to limit gains.
Corn futures are not even attempting to trade higher this morning as they know the US has a massive crop with big yields coming. Additionally, poor wheat quality makes for more feed wheat competing with the corn for feed market, thus giving corn prices further reason to trade lower. Export demand for US corn is extremely quiet and with a lack of weather threat to the US crop at this point it is pretty difficult to find reason for corn prices to trade higher.
Look for choppy/mixed trade as we head into the weekend.
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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