SunPrairie Grain Morning Comment
MINOT - Sep 10/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 9:10 AM CDT 09.10.2014:
Wheat is down 3-6 cents, abundant global supplies continue to hammer the futures markets (Mpls Dec last trade 6.02, KC Dec 6.19 ¾)
Soybeans are 2-3 cents higher, lower trade overnight finally spurs some buying interest (Nov last trade 9.94 ¾)
Corn is up 0-1 cent, trying to follow the soybean market higher, tough for the market to find strength (Dec last trade 3.44 ½)
Sunflowers are unchanged, soybean oil futures are a bit lower this morning but not enough to really influence sunflower prices
Canola is down 0-5 cents, strong harvest selling pressure works to push futures prices lower
Grain futures markets are really pretty quiet this morning as it seems they're waiting for tomorrow's release of the production and monthly USDA S&D reports. We could be seeing some traders even up their positions in front of the reports as well. Wheat futures could be a little bit lower this morning due in part to news that Russia has withdrew the majority of its troops from Ukraine. The US dollar is lower this morning after recent strong gains. Crude prices are down about 60 cents/barrel at the moment.
It's pretty much a given that wheat futures (well, grain futures in general) will not be at levels we would like to see as we trade through this year. However, the big wildcard in the wheat markets will be basis values and the impact on them by the freight situation. Right now, car placements have been OK but that will most likely change as corn and soybean harvest ramp up in major growing areas. If rail freight is hard to come by we could see basis values remain at high levels, or even climb higher. In no way is the market concerned about the overall supply of grain, but getting the supply to end users results in bids being spiked up. The same is the case for the flax market. Canada is going to produce more flax than they did last year and ND acres are up 84% from last year. So why are prices relatively high (look at canola prices compared to flax!)? Well, end users are having a tough time getting the flax that's out there to the marketplace. Like durum, many end users were hoping to see flax come from Canada, but with the freight situation that product just isn't moving south, which is pushing bids higher. Freight will be the uncertainty in these markets and be a small glimmer of hope in these otherwise crumby markets.
Corn and soybean futures are slightly higher this morning after seeing losses to start the week off. This just seems like positions getting squared up ahead of the USDA reports scheduled to come out tomorrow morning. Slow export demand in the corn market will limit gains and soybeans are just going to keep looking at large crop expectations.
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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