SunPrairie Grain Morning Comment
MINOT - Feb 12/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:40 AM CDT:
Wheat is down 1-3 cents, spring wheat reluctantly follows winter wheat markets lower (Mpls May last trade 6.37 ¾, KC May 6.55 ¾)
Soybeans are off 6-10 cents, China cancels bean purchases (May last trade 13.11 ¼)
Corn is down 1-3 cents, increase in movement expected with improving weather across major corn producing areas of US (May last trade 4.45 ¼)
Sunflowers are unchanged, soybean oil is not moving this morning which is surprising given sharply lower soybean, meal and canola markets
Canola is down 20-30 cents, heavy selling in the futures market pushes futures lower
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Grain futures markets are showing a mostly lower start to the day. Spring wheat futures are fighting their way higher and bean oil is slightly in the green as well but other than that it's pretty much losses across the boards for grain futures. Corn is down about a penny, beans are showing almost double digit losses and winter wheat futures are dragging the wheat markets lower. The US dollar is higher, which could be having a negative impact on grain futures. However, crude prices are up about $1.20/barrel. The USDA is to release its baseline acreage estimates tomorrow morning. I think we can expect to see a decline in corn acres and increase in soybean acres - the big question mark, though, is how big will those changes be?
There is not a whole lot of fresh news for the wheat markets to trade off of this morning. It seems that winter wheat futures are on the defensive due to forecasts for increased snowfall to Kansas. Snow will provide needed moisture to dry areas and protection from cold temperatures, so that adds weight to winter wheat futures prices. Keeping things elevated, though, are indications of strong global demand.
Soybeans are showing double digit losses this morning due in part to confirmation of cancellations of purchases of US soybeans and just relaxing after Tuesday's gains. The market has suspected for a couple weeks now that China may be switching some purchases from US to origin to South America, so these cancellations do not really come as a surprise but are unfavorable for prices nonetheless. Also weighing on things are forecasts for rains to dry areas of Brazil that will help nicely finish off some of the soybean crop.
A pickup in US corn movement is expected as weather improves across the US. Corn has seen some pretty great demand news this week but prices are not reacting at all the way one would expect. An unenthusiastic reaction to strong demand news is due to the fact that there is still a huge corn crop that needs to be marketed and moved...and the marketplace knows that. So as winter turns to spring we can probably expect corn movement to pickup and that will keep futures and basis prices from rising too much. Also weighing on prices are improving weather forecasts to South America and rains falling in dry growing areas. For what it's worth - Brazil is about 20% done seeding their second corn crop. The big question mark for the US is 2014 acres...the USDA will provide us with some insight there tomorrow morning.
It looks to be a pretty quiet day for the corn and wheat markets but you can look for soybean prices to really struggle due to the negative demand news. Canola is off pretty heavily which will add weight to the oil markets in general. Soybean oil maintaining its strength, despite the fall in canola futures, is a good sign.
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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