SunPrairie Grain Morning Comment
MINOT - Jan 24/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:30 AM CDT:
Wheat is 3-5 lower, relaxing after yesterday's gains despite recent, strong global demand (Mpls March last trade 6.15 ¼, KC March 6.31)
Soybeans are down 8-10 cents, South American crop potential and improving weather conditions (March last trade 12.71)
Corn is 1-3 lower, lower with falling soybean market, South American weather (March last trade 4.26 ¼)
Sunflowers are down 5-10 cents, bean oil off with soybeans and canola today
Canola is down 10-15 cents, selling hits market, weaker crude and soy complex not helpful
I apologize for not sending an update out yesterday, I was unexpectedly out of the office. It looks like the grain markets had a pretty good day yesterday. Well, they weren't lower at least (with the exception of soybeans). Today it looks like we're going to give back what we gained yesterday and then some. Everything is lower this morning and it doesn't look like a fun finish to the week.
If wheat futures do not want to perform well, at least we can focus on basis to keep us motivated. Spring wheat basis remains strong for Jan/Feb delivery with logistical issues the main reason. Basis drops off to -50 the March spring wheat contract for March delivery. If rail logistics do not improve we could see that strong basis number continue. However, if movement picks up then we will lose that 35 cents in basis from February to March. Global export demand has been pretty steady recently but wheat futures are failing to take notice for now. Yesterday prices spiked slightly higher on some concerns about a lack of snow cover and potential winter kill in Kansas and Nebraska. Export sales for the week were in line with estimates (350-650) at 413.4 thousand metric MT(TMT).
Long liquidation spurred by improving Argentinean weather has soybean prices in the red again this morning. Futures are down about six cents across the board and showing no sign of wanting to trade higher. The market is also concerned about the possibility of China switching their US purchases of soybeans to South America as SA supplies will be available to the market soon. Even much stronger than expected export sales for the week are not helpful to futures this morning. Export sales estimates were expected to come in at 300-625 TMT and were much higher at 1673.20 TMT. Soybean oil, meal and canola are all lower this morning and it looks like a pretty negative finish to a negative week for those markets today.
There is not much hope for a quick resolution to the Chinese GMO issue. Thoughts are we could see something done by the end of March or it could be as late as June...or more? Needless to say, more rejections of US shipments are expected. South American weather combined with falling soybean prices are also weighing on the corn market this morning. There is just little fresh, favorable news to drive prices higher. Export sales for the week were 693.2 TMT, in line with estimates that ranged from 200-800 TMT.
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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