SunPrairie Grain Morning Comment
MINOT - Sep 17/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 9:00 AM CDT 09.17.2014:
Wheat is -2 to + ¼, not much happening in wheat futures, market is oversold but has no reason to rally with abundant global supplies (Mpls Dec last trade 5.66 ¼, KC Dec 5.82)
Soybeans are 2-4 higher, staging a slight bounce after several lower sessions, large crop will limit gains (Nov last trade 9.83 ¾)
Corn is down 1-3 cents, not a lot of demand news around, good harvest progress in areas with large yields reported (Dec last trade 3.42)
Sunflowers are unchanged, soybean oil is slightly higher but not enough at the moment to influence sunflower prices
Canola is unchanged, futures are a little choppy due to strong harvest pressure but they could turn higher with the soybean complex today
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We're starting out another day with quiet grain futures markets. Good yield reports are coming from corn and soybean harvest and weather looks promising as well, with no super cold weather to threaten the crop in the forecast. The market knows that a lot of grain is going to move at harvest, especially when the major corn and soybean growing areas start ramping up. The big question is whether or not the railroads will be ready to handle the harvest movement. The US dollar is lower and crude prices are up about a dime per barrel.
Spring wheat harvest continues to prohibit gains in that market. Reports of high yields, low protein and color with some higher VOM numbers mixed in are pretty common. However, as harvest has progressed we have noticed that, locally, our protein is improving. Earlier in harvest we were seeing an average of about 13.5 protein on loads we dumped throughout the day. Over the past few, though, those protein levels have started to rise, putting our average closer to that 14.0 mark. We're seeing protein all over - some coming in with 12 and some coming in with 15. Early VOM was a concern but now that is not too much of an issue. We still have a long way to go, though, as our northern group has barely even begun to scratch the surface on wheat harvest due to the whopper canola crop that's coming off up there. Globally wheat prices are falling as production and supply estimates are steadily increasing.
There are a few stories out there indicating that Chinese demand for US soybeans could drop this year due to poor crush margins. However, others note that crush margins have been poor for awhile and the recent drop in soybean prices could keep demand strong. Harvest activity is picking up in the southern and eastern growing regions and that will keep prices from gaining too much as we move forward.
The USDA and China met recently to discuss China importing US DDG's. China restricted US DDG imports due to Syngenta's MIR-162 GMO trait that is not approved for shipment into China. There are reportedly 500 MT of DDG containers floating at port in China, with owners refusing to incur the cost of moving them. There are ideas that current USDA corn export sales estimates are too high which could result in downward revisions to those estimates, and would only weigh more on futures. However, the market is also thinking there will be a reduction to the US harvested acreage number due to the recent FSA data which would be favorable for prices if it happened.
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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