MINOT - Jul 28/10 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
Wheat: 2-4 lower, following overnight and lower corn prices
Soybeans: 3-5 higher, tight old crop supplies
Corn: 1-3 lower, crop conditions are improving as weather turns
Grain futures were a mixed bag yesterday as spring wheat was higher,
corn was lower and soybeans were pretty much unchanged. Corn traded
lower on favorable pollination weather. Soybeans started out strong but
failed to hold their gains and gave most of them back into the close.
European wheat markets were also mixed yesterday as French prices
declined after rains entered the area and prices in Germany traded
higher on continued high temperatures.
Overnight trade was mixed again into this morning as wheat and corn
prices were pressured lower and soybean values continued to increase.
Crude is $1.75 a barrel higher this AM and the dollar is in negative
territory - maybe we can find some support from outside influences
Corn futures fell in overnight trade due to an increase in the crop
conditions rating - from 71% to 73% good to excellent. The increase in
ratings is credited to crop supportive weather. There are ideas floating
around that higher crop ratings could lead to larger yields. The USDA's
current yield estimate is 163.5 bushels - if the crop exceeds this
number, concerns about production and/or a smaller carryout will be
eased. Export demand has been pretty sluggish the past few weeks but
we're still ahead of what is needed to stay on pace with USDA export
The USDA reported a 1% decline in soybean crop conditions this week -
putting the crop at 65% good to excellent. Continued declines in crop
ratings, combined with tight old crop supplies, have been lending the
soybean market a helping hand this past few trading sessions. The buzz
about tight OC supplies is due to higher soybean prices in South America
and decreased ocean freight rates - making it cheaper to get US soybeans
to overseas destinations. Gains in the soybean market could be limited
by increased crop ratings in the top producing states of Iowa and
Illinois. Also - rain fell in much needed, dry areas, easing concerns
about crop stress.
Wheat is expected to follow the corn market lower today. Wheat is the
market that continues to baffle. As I've said time and time again -
there is absolutely no fundamental reason for wheat prices to trade
higher. But somehow the wheat market continues to find buying interest
(non-commercial, that is) and prices climb higher. The large US carryout
number will be kept in the back of the market's mind in the months to
come, though. Our wheat glut will not go away for some time.
The spring wheat crop is holding strong at its 83% good to excellent
rating. North Dakota spring wheat is reportedly 83% good to excellent -
a 3% decline from last week's crop ratings. The crop is 72% headed
versus 49% last week, 44% last year and a 77% average. High crop
conditions ratings have spurred thoughts that we could have higher than
expected yields - boosting production numbers even more than what was
originally estimated by the USDA. Winter wheat harvest is 63% complete
overall and 92% done in both Kansas and Oklahoma. I've had reports about
the HRW crop...and they're all different...but I think the best way to
sum it up is big yields and a mixed bag of protein. Once the dust
settles we'll get a firm idea of just how things came out. The US
barley crop is rated 85% good to excellent - which is unchanged from
last week. North Dakota barley is 80% good to excellent which is a 2%
decline from last week. Our crop is also 81% headed vs 54% last week,
48% last year and a 49% five year average.
According to the USDA National Agricultural Statistics Office in ND -
canola blooming is 96% complete which is about a week ahead of average.
Flax is reportedly 50% bloomed which was a 33% jump for the week. North
Dakota sunflowers, according to the USDA, are rated 78% good to
excellent, canola 83% and flax 80%. All in all - things are looking
pretty good around the state right now.
Weather for the next week is calling for higher than normal temperatures
and near to below normal precipitation across the state (with the
exception of the eastern part). Thunderstorms could produce damaging
hail in areas - reports of softball sized hail came from that small
storm in Dickinson last night and the storm a little closer to home in
the Stanley/Palermo was said to have produced egg sized hail.
Thunderstorms will be spotted throughout the week and into the weekend -
with rains entering the eastern part of the night most likely on Sunday.
As always you can reach me at Kayla.Hoffman
To discuss this report further or for specific trade ideas please contact me
Toll free: 800.735.4956
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