SunPrairie Grain Morning Comment
MINOT - Jan 21/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:55 AM CDT:
Wheat is up 0-3 cents, shorts buying back some sold positions as contracts are near lows (Mpls Mar last trade 6.18 ½, KC March 6.23 ¾)
Soybeans are down 20-25 cents, dry Argentinean areas get rain and are forecast for more (March last trade 12.93)
Corn is 2-4 lower, taking cue from falling soybean market, ideas that Brazilian crop is bigger than current USDA estimate (March last trade 4.21 ¾)
Sunflowers are up 5-10 cents, despite lower soybean meal and soybeans, soybean oil is higher...possibly with crude
Canola is down 0-10 cents, futures a bit lower this morning, stronger bean oil and crude may support prices a little
Markets were closed yesterday for the Martin Luther King Junior holiday and today we're trading news from over the weekend. Soybeans are focused on Argentina's weather, corn is concentrating on Brazilian acres and wheat prices are being supported simply because futures are feeling oversold. Other oilseeds could be mixed today. Soybean meal is sharply lower this morning, possibly adding weight to soybean futures. Soybean oil is holding its own and trading higher, which may result in steady flax and sunflower prices. Canola futures are slightly lower, but could find some support from stronger soybean oil prices. The US dollar has bounced around either side of unchanged and is currently just slightly higher. Crude futures are up about 70 cents/barrel.
Speculators could be buying back some of their short (sold) positions in wheat futures this morning as that seems the best reason to justify the very small bounce we're seeing in prices. Some support could be coming from concerns about the impact of cold weather on the US winter wheat crop. However, cold weather has the biggest impact on winter wheat after it breaks dormancy, so those concerns shouldn't be too great for now. Also encouraging is news that Egypt has been buying wheat and has even picked up some US wheat in the process. However, global supplies are still more than enough to meet demand and that fact will continue to weigh on prices as we move forward.
Improving South American weather conditions are really whacking soybean prices so far this morning. Over the weekend dry areas of Argentina received much needed rainfall, and there is more in the forecast. The soybean market is showing exactly how a weather market operates. Prices shoot higher with concerns of crop damage and drop off just as quickly when those concerns are eased. Also, new crop South American soybeans will be available to the market relatively soon as harvest activity reaches its peak about March. Logistics will be a mess, as they always are, but the fact remains that the market will be flooded with what is expected to be a record crop.
The corn market is working its way lower on a better than expected crop estimate out of Brazil. Brazilian acres are estimated to be lower than they were last year...however a recent production estimate has the Brazilian crop 5.6 million metric MTlarger than the current USDA estimate and that is what is weighing on futures. Additionally, improving weather in South America also has prices on edge. The corn market also is lacking supportive news to prevent prices from falling lower as well
Hopefully wheat can hold strength against falling row crops this morning. Futures trade is simply adjusting to news received over the long 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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