SunPrairie Grain Morning Comment
MINOT - Jan 17/14 - 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:
Wheat prices are down 4-6 cents, slide continues, market cannot sustain yesterday's gains (Mpls March last trade 6.20, KC March 6.25 ¼)
Soybeans are 5-7 lower, forecasts for weather relief to hot, dry Argentinean areas (Nov last trade 11.19)
Corn is 2-4 lower, falling with wheat, Chinese export cancellations (March last trade 4.25 ¾)
Sunflowers are 0-5 lower, falling with soybean oil, canola
Canola is off 10-15 cents, futures sell off with soybeans
*Martin Luther King Holiday*
Markets are closed Monday for the Martin Luther King Jr Holiday. SunPrairie Grain will be open but there will not be a morning wire that day.
Sorry for the long break without warning! I was out of the office last week unexpectedly on Monday due to daycare closure, then at our corporate office and then off to Montana for some skiing. I was back in the office yesterday and the day before but morning meetings had me tied up. Anyway, we're back and ready to roll and I'll see if I can't get some meaningful information out to you this morning. Grain futures are struggling this morning after most had a stronger day yesterday. Soybeans are trading South American weather, wheat keeps getting sold off and corn has some negative demand news.
Wheat prices have been on a bit of a roller coaster ride since I've been gone. Thankfully, due to a hefty basis increase, prices are back on the rise. Rail issues, keeping grain from moving, have wheat basis values strengthening and us paying over $6 for a bushel of spring wheat. The big price increase has not been due to a large bump in the futures market, this is primarily basis strengthening due to the fact that end users cannot get wheat because rail performance is so poor. So what does that mean? It means that when rail performance picks back up and end users get their grain, prices will relax because it will not be necessary to pay as much to get a bushel of wheat to the mill. When your demand for a good is greater and that good is scarce, you're willing to pay more for it, right? End users and spring wheat are no exception.
Other news in the wheat market, influencing futures prices, comes primarily from last week's USDA report. The USDA increased its global production estimate which has done nothing but weigh on prices since. The wheat futures markets are feeling very much oversold and investors should be interested in some bargain buying...but prices continue to drift lower. Weighing on things even more is increased production out of India which will result in additional exports. There are some concerns about the melting of snow, exposing some of the winter wheat crop and the impact that could have on winter kill this spring. However, it seems a bit early to start worrying about that too much.
Soybeans found support early this week from hot, dry weather causing moisture stress for Argentinean soybeans and other oil crops. This led the soybeans to a pretty good rally, especially when combined with strong demand and tight old crop US supplies. The lack of moisture in Argentina led to some thoughts that double crop beans may not be a possibility. However, forecasts are calling for decent rains over the weekend which has resulted in a futures decline yesterday and today. Chinese export demand has been very strong and US soybeans saw great export sales reported yesterday. The market seemed to take little notice to the strong sales, though. Soybean futures are trading a South American weather market right now and look for prices to be fairly choppy and inconsistent as forecasts are dissected and traded.
Corn futures are sliding lower after finishing yesterday a couple cents higher. China cancelled some purchases and that is really weighing on corn futures prices. Wheat declines combined with a huge US crop also have prices on edge. Last week the USDA decreased its yield estimate for the 2013 crop which gave prices a pretty good bump, but that all seems to have been priced into futures by now.
Have a great weekend!
Kayla Burkhart
Broker/Procurement
SunPrairie Grain
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1800 13th St SE | Minot, ND 58701
P 701.857.9322 | F 701.839.5515 | C 701.720.4682
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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