SunPrairie Grain Morning Comment
MINOT - Feb 4/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:35 AM CDT:
Wheat is up 1-5 cents, winter wheat crop ratings drop, spring wheat follows winter wheat higher (Mpls March last trade 6.12, KC March 6.29 ¾)
Soybeans are 5-7 higher, strong soybean meal prices and tight US supplies (March last trade 13.00 ¾)
Corn is up 2-4 cents, following soybeans, good US export demand (March last trade 4.38 ½)
Sunflowers are unchanged, soybean oil cannot jump on higher price bandwagon, sunflowers struggle
Canola is down 0-5 cents, futures slightly lower
*Upcoming Grain Marketing Seminars*
February 4th - Introduction to Futures, Hedging and Basis, Ryder Senior Center, 12:00 lunch, 12:30 Meeting
February 11th and 14th - Introduction to Options Trade, Minot Office, 12:30 lunch, 1:00 Meeting
February 25th - Introduction to Options Trade, Ryder Senior Center, 12:00 lunch, 12:30 meeting
February 26th - Introduction to Futures, Hedging and Basis, Lignite, 8:00 AM
*If you don't see a location near you do not fear - there are more to come!
Another fairly quiet start to the day trading session in the grain futures this morning. Grain prices are sticking to fairly narrow ranges. Some concerns about slowing movement could be supporting prices. The US dollar is higher but gains could be limited by concerns about the general state of the US economy. Crude prices are soaring higher this morning, up over a dollar/barrel at the moment.
The big news for the wheat market this morning is a drop in US hard red winter wheat state crop ratings. The Kansas crop rating has dropped from 58% good to excellent to 35% g/e. The poor/very poor rating increased from 6% to 20% in Kansas. Oklahoma saw ratings change as well from 63% g/e and 8% p/vp to 36% g/e and 24% p/vp. That being said, wheat futures are not reacting as drastically as we may hope. Sure, prices are higher, but less than a dime. The market knows that the winter wheat crop is resilient, so seeing a decline in conditions is not anything major and will not be huge market moving news until damage can be assessed. From a global standpoint, stocks are abundant and export competition is pretty stiff. However, some support may come from estimates of declining Ukrainian wheat production for this year.
Ukrainian soybeans, though, are expected to increase in production this year. Not really a surprise to see increased soybean acres given the price of new crop soybeans relative to new crop corn and wheat. Old crop soybean futures are on their way higher again today as soybean meal prices increase and US old crop stocks are tight. New crop prices are struggling - the market seems to know that the US has a big crop coming and global supplies are ample enough to meet demand. Brazilian prices are reportedly declining as harvest progresses and the crop becomes available to the marketplace.
An announcement of a corn sale to an "unknown" destination spurs hope about increasing demand for US corn. Considering a record crop needs to be marketed, we could use all the demand we can get. Exports have been so good recently, though, that we may see an increase in the USDA export estimate in next week's report. Oh and Ukraine is expected to decrease their corn production this year as well.
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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