SunPrairie Grain Morning Comment
MINOT - Sep 15/14 - 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 09.15.2014:
Wheat is 4-6 lower, harvest pressure and ample global supplies let wheat continue to drift lower (Mpls Dec last trade 5.72 ¾, KC Dec 5.88 ¼)
Soybeans are down 1 to +1, market waits for harvest to progress and for more yield reports (Nov last trade 9.84)
Corn is unchanged, futures are just slightly lower to slightly higher, market knows a big crop is coming (Dec last trade 3.38 ½)
Sunflowers are unchanged, bean oil market very quiet this morning with uneventful soybean futures
Canola is unchanged, futures mixed a bit this morning, but overall it's a quiet day so far
There's little fresh news in the grain markets this morning and prices are mixed. Corn keeps jumping around both sides of unchanged, soybeans are higher and wheat futures are the losers of the morning, down a nickel or more across the board. The US dollar is a little higher this morning on expectations for US banks to start increasing interest rates soon. Crude futures are down about 15 cents/barrel. The freeze event forecast for Friday/Saturday over many growing areas did not occur, letting grain markets fall.
Right now spring wheat protein premiums and discounts are widening out pretty heavily due to harvest reports of a lower pro crop out of the top producing state of North Dakota. The market tends to overreact to quality discounts, especially right at harvest. If you're looking solely at protein premiums, now or soon after might be the time to think about moving some high pro stuff and hanging onto the low pro stuff until those discounts relax. High protein could continue to be worth a lot as we move forward but I feel like the discounts for anything under 14 could relax after harvest as right now the discounts are severe. Basis values keep on climbing, though, as end users are willing to pay for high quality wheat due to the global abundance of low quality supply. Spring wheat harvest is expected to be reported at 75-85% complete in this afternoon's weekly USDA progress report, so by this time next week spring wheat harvest will probably be pretty well wrapped up. Wheat estimates out of Russia increased which will keep weight on futures markets as well.
The durum market has spiked up again. Strength through the spring months was due mostly to logistical issues and the fact is that there's a lot of durum from Canada that wanted to move south, but was unable to do so as freight issues bogged the system. Now we are continuing to deal with freight issues and we are also seeing quality problems in this year's crop, meaning that the available supply of milling quality durum is tight. So prices are shooting higher, especially if you have milling quality.
The soybean market is waiting for harvest and yield reports to start ramping up. Record yields of 100+ out of Arkansas are being reported again this year (there were some reports of 100+ bpa out of Arkansas last year as well). There are some hopes for strong Chinese demand which could be providing futures with some strength this morning. Early frost concerns seems to have left most growing areas and prices are, like I said above, now focusing on this year's production potential again.
Corn will see its first US harvest progress report released from the USDA this afternoon. I'm hearing reports from many Illinois fields that are at 200+ bpa, so the corn market is expecting to see increases in crop production, needless to say. Harvest pressure could become prominent in the futures markets as we start seeing selling pressure and the big US gets bigger. With the lack of a large frost threat futures will have a tough time finding reason to trade higher.
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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