SunPrairie Grain Morning Comment
MINOT - Sep 12/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:40 AM CDT 09.12.2014:
Wheat is down 3-6 cents, higher US dollar, USDA reports increased US and global stocks (Mpls Dec last trade 5.88, KC Dec 6.02 ¼)
Soybeans are up 5-7 cents, recovering after this week's hefty losses, market still has to come to terms with large crop but export demand has picked up (Nov last trade 9.87 ¾)
Corn is 0-2 higher, finding some strength before the weekend, following soybean strength (Dec last trade 3.43)
Sunflowers are 10-15 higher, bean oil is rallying pretty well this morning, likely pulling sunflower prices along for the ride
Canola is up 15-25 cents, futures have had a long tumble, it's time for some recovery, basis values want to stay weak with strong selling
The grain futures markets are still trying to recover from yesterday's news from the USDA which really did not have anything favorable to say, hence the drop in prices. Additionally, the frost that never came to be is also weighing on prices. We're not out of the woods from damage due to cold temps, but forecasts are called for increased temps as we move forward. The US dollar is higher again this morning which does not bode well for grain futures prices. Crude futures are down about 20 cents/barrel.
Negative USDA numbers continue to hang on wheat futures, dragging them lower again this morning. The USDA increased its US wheat ending stocks numbers from 663 million bushels estimated last month to 698 million bushels. Additionally, global stocks estimates were increased from 193 million metric MT(MMT) to 196.4 MMT. So there's a lot of wheat and not a lot of demand for US wheat due to cheaper prices elsewhere in the world. Yuck. Also, spring wheat harvest progress is putting a damper on things, but hopefully that gets wrapped up soon so that selling pressure no longer has a negative impact on prices. As I said Wednesday, the biggest wildcard in wheat prices will be basis values as the trend for futures looks to be lower.
The soybean market is staging a "rebound" after this week's losses. I use the term rebound loosely because we're up a whole two cents...considering the losses the market has seen this week it really isn't too exciting. USDA increased their soybean yield estimate to 46.6 bushels per acre, increasing production and carryout despite an increase in export sales estimates. So soybeans are looking at huge supplies, as we knew, and that has the futures markets reluctant to climb higher. Some believe the soybean yield could go even higher in next month's report. Early harvest yields remain high also. If you have not locked in soybean prices yet, I recommend doing so as it looks like these futures could continue to crumble.
We saw the USDA increase corn yield yesterday to 171.7 bushels per acre, which put production to 14.395 billion bushels and ending stocks at 2.002 BILLION bushels. That is a lot of corn!! Those are record yield, production and ending stocks numbers and thoughts are that we could see further increases to those yield numbers next month. However, those who think that prices should go higher (we like to call them the "bulls" in the marketplace) are focusing on ideas that we could see a reduction in harvested acres, which was left untouched in this month's report. Today prices are just a little bit higher in front of the weekend but they're already backing off, so we may not close higher today.
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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