SunPrairie Grain Morning Comment
MINOT - Sep 9/14 - 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 09.09.2014:
Wheat is 3-5 lower, global supply abundant and demand for US wheat is not exciting (Mpls Dec last trade 6.05 ¾, KC Dec 6.24 ¼)
Soybeans are down 8-10 cents, fund selling, higher US dollar and big crop expectations push prices lower (Nov last trade 9.98 ½)
Corn is 3-5 lower, frost concerns diminish as forecasts change, take that premium out of the market (Dec last trade 3.44)
Sunflowers are down 0-5 cents, bean oil is slightly lower with the drop in soybean futures this morning and pulls sunflowers along for the ride
Canola is 10-20 cents lower, futures dropping off with soybean complex, general harvest pressure
Harvest has begun in our area and it feels great! However, it makes it a bit more difficult for me to find the time to write a morning update so I apologize if they're spotty over the next couple of weeks. I'll do my best to get them to you daily! I'm sure nobody really feels like reading, anyway, as the outlook for grain prices does not look so great. A little bit of a cold weather/frost scare had worked a premium into prices but as forecasts changed, so did the mentality in the futures markets and prices have turned lower again. The US dollar's recent rally does not help prices out, either. The US dollar has been rising as expectations for the Federal Reserve to increase interest rates indicates the US economy is doing better (giving the dollar strength). The USDA's monthly S&D report is Thursday so we are likely seeing some positions evening up ahead of that.
Spring wheat harvest and a higher US dollar are not too favorable for spring wheat prices right now, as they're falling off another 6-8 cents this morning. Yesterday's cash price gain was due solely to a basis increase as futures were actually lower. Freight and quality problems are the main factors for basis support at the moment. Driving winter wheat markets lower are ideas of pretty good planting due to replenished soil moisture in dry areas. The bottom line is that global supplies are abundant and demand cannot keep up. US prices are also not competitive in the global marketplace. One "good" thing though is that Australia recently saw a decreased production estimate. There is news coming out of France that quality issues were not as prominent in some areas as others, so now the story is that maybe there won't be as much wheat stuck in the feed markets are originally thought.
Fund selling, a higher US dollar and big yield ideas have soybeans seeing double digit losses again this morning. Our local prices officially have an eight in the front and I don't know if that will change as we move toward harvest. Brazilian soybean production numbers for 2013-14 increased as did estimates for the 2014-15 crop, meaning this could be a longer term drop in prices. Argentina is reportedly seeing some beneficial weather as well which will only keep things pressured. Unless something very drastic happens with the crop I just do not see that soybean futures will recover much.
The frost scare is being taken out of the corn market and we're seeing losses again. The weather models are changing and the cold weather is not going to be as widespread or chilly as previously anticipated. The crop is a week or two behind average, though, which will keep us focused on the potential for damaging, cold temperatures. France increased its production estimate, only adding weight to the global balance sheet. Also, it's pretty hard to find some exciting demand news around for this market as well.
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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