SunPrairie Grain Morning Comment
MINOT - Feb 13/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:45 AM CDT:
Wheat is up 0-4 cents, market reluctantly higher, little fresh news to guide prices this morning (Mpls May last trade 6.40 ¾, KC May 6.56 ½)
Soybeans are 9-12 higher, concerns about the impact hot, dry weather has had on the Brazilian crop (May last trade 13.19 ¾)
Corn is unchanged, futures are very quiet for corn this morning, even better than expected export sales are not helping things (May last trade 4.46)
Sunflowers are up 5-10 cents, bean oil slightly higher this morning with the rise in soybean and soybean meal futures
Canola is down sharply again today, 30-40 cents and falling, strong fund selling pushes prices lower
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February 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
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The US dollar is lower this morning, as are crude futures, but grain prices are doing fairly well (with the exception of canola). Export sales for the week were strong for corn, dismal for beans and in line with estimates for wheat. Chatter that Goldman Sachs predicts negative returns on commodity investments this year due in part to falling prices could limit fund participation in the grain markets. The USDA is to release its baseline acreage estimates for 2014 this morning at 10 AM CDT.
There is little fresh news for prices this morning so wheat's doing what it has been doing for the past week or so...trading higher. Spring wheat is leading the way with May futures up about four cents. Hard red winter wheat futures are up only a penny as favorable weather is limiting gains. News that Europe increased its export forecast estimate is no big surprise given robust global demand. The European Union also decreased its 2014 harvest estimate, but projections are still larger than last year's crop. Export sales for the week were pretty uneventful at 626.60 thousand metric MT(TMT), in line with estimates that ranged from 250-850 TMT.
China cancelled some old crop shipments this week but turned around and purchased new crop soybeans from the US. So the cancellation isn't too much to be concerned about after all. However, there are reportedly three US cargoes sitting in China being tested for the unapproved GM trait MIR-162. The market will be waiting to hear results. If the trait is found in US cargoes coming to China, you can definitely expect more cancellations. Soybean prices are higher today due to concerns about hot, dry weather and the impact it has had on the Brazilian soybean crop. There is rain in the forecast but many already feel that damage has already been done. Export sales for last week (reported today) were pretty small compared to what we've seen, which is no surprise because China was on holiday for the Lunar New Year last week. Sales came in at 296.20 TMT, below estimates that ranged from 400-1100 TMT.
Canola prices are being heavily sold off again this morning. There doesn't seem to be a huge fundamental reason for the selloff, it seems to be more due to speculative selling. Canola futures are seeing some of the lowest levels since 2010. Farmer selling has been fairly steady as well, limiting price gains.
The USDA reported that there were 6.4 billion bushels on farm in the US as of December 1st, 2013. Corn prices have been supported recently by very strong export demand...however when prices rise, farmer selling picks up and that puts pressure on futures and basis values. Also, despite an anticipated decline in US acres this year, the market is still expecting that corn supplies could increase in 2014-15. Needless to say, the market is not worried about keeping enough corn around and that will limit upward momentum in the corn market. Export sales for the week were strong again at 1392.40 TMT, above estimates that ranged from 400-1350 TMT.
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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