SunPrairie Grain Morning Comment
MINOT - Sep 23/14 - 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 09.23.2014:
Wheat is down 0-2 cents, trying to find strength after reports of Egypt's purchase over the weekend, not doing well (Mpls Dec last trade 5.36 ½, KC Dec 5.59 ¼)
Soybeans are 0-2 lower, overnight gains found from soybean oil futures, lack of news to push prices higher lets them drift lower (Nov last trade 9.36 ¾)
Corn is down 2-4 cents, harvest pressure has already begun, hard for futures to find reason to trade higher (Dec last trade 3.26 ¾)
Sunflowers are up 0-5 cents, bean oil finding good strength right now and might be enough to pull sunflowers higher
Canola is 10-20 lower, that market keeps on sinking with harvest pressure, hard time finding a bottom
I'm back! Sorry for the little break but as I've mentioned before, harvest time makes it difficult to get these morning updates out some days. Grain futures have continued their downward momentum since my last writing with big yields, harvest pressure and an overall lack of fresh, favorable news to push things higher. The US dollar is lower this morning and crude prices are up about 40 cents/barrel at the moment.
Wheat futures tried trading higher yesterday as an announcement over the weekend that Egypt bought some US soft red winter wheat for the first time in a long time is encouraging. However, the market wants to see more demand news before it gets too excited. With US prices falling, we are more competitive in the global marketplace. However, there is still a lot of wheat for us to compete with globally and we are definitely not the only player in the game. Spring wheat harvest is wrapping up and according to the USDA 86% harvested, compared to the five year average of 92% done. US winter wheat seeding is 25% done, which is just slightly ahead of average pace and weather looks good. Ukraine is reportedly seeing favorable seeding conditions as well.
Soybean futures are really hoping for good news but without being able to find any, futures are falling. Harvest is 3% done compared to an 8% average but early yields are high, high, high and that is not expected to change as harvest progresses. Soybeans could really use some favorable news to help push prices higher and without it we keep putting in fresh contract lows. Technical selling has made the soybean market subject to daily freefalling and I can only hope that the end is in sight soon. Brazilian planting is reportedly ahead of pace and farmers are expected to seed a lot of acres. The market is also talking about US acres for next year already...and for the first time since the '90s we could see more soybean acres than corn acres seeded in the US. Favorable Chinese economic datat had overnight prices higher but gains faltered as the day session began.
Corn harvest pressure is pushing futures lower and pulling everything along for the ride. Harvest is only 7% complete so it could be a long, long harvest of sluggish prices if we're already seeing this much price pressure. Near term weather looks really good and there's no frost threat in areas that have not reached maturity. There is some above average precip in longer range forecasts but at the moment that just isn't a concern. High yield reports are coming from harvesting areas and it looks like we could get the whopper crop that the market is expecting. A lack of buying interest only lets prices fall further.
After reading this I'm sure you wish I'd just kept quiet for the day - I wish I had something positive to say but with a lack of fresh demand news and abundant global supply there is little reason for prices to trade higher. We just have to hope we hit bottom soon and find support levels to stop this freefall.
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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