SunPrairie Grain Morning Comment
MINOT - Feb 21/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:50 AM CDT:
Wheat is down 1 to up 1, KC winter wheat slightly higher but other markets lower, reduced demand due to global competition hurts prices (Mpls May last trade 6.60 ¼, KC May 6.84)
Soybeans are down 0-2 cents, USDA projects record US soybean crop for 2014 (May last trade 13.46 ½)
Corn is 2-4 lower, export sales on low end of estimates (May last trade 4.59 ¾)
Sunflowers are unchanged, quiet day so far in the soybean oil market
Canola is up 5-10 cents, market slightly higher, overall uneventful day
The USDA annual outlook forum has provided some insight into what we can expect for US production this year and is having a slight impact in the markets. The news from the forum is considered neutral/negative for grain prices. The chaos in Ukraine has not yet had a large impact on grain prices but if it continues we could see exports get delayed, interrupting the Ukrainian crop from reaching the export market. For what it's worth the US dollar is higher and crude prices are lower this morning.
The USDA estimates that US all wheat acres will be at 55.5 million in 2014 with average yield at 45.8 bushels per acre and total production at 2.16 billion bushels. Ending stocks are forecast to increase to 587 millbu (558 mill bu estimated for 2013-14). The increase in ending stocks comes from a reduction in exports due to strong competition in the global export marketplace. Speaking of exports, sales for this week came in at 491.5 thousand metric MT(TMT), in line with estimates that ranged from 400-700 TMT. Futures this morning are slightly lower, seemingly taking in forecasts from the USDA for larger stocks and declining demand.
Soybeans are higher despite a record crop estimate for 2014 coming from the USDA's outlook forum. The US is forecast to seed 79.5 million soybean acres, yield 45.2 bushels per acre which results in production of just over 3.5 billion bushels. Ending stocks will naturally increase from the large production estimate and are expected to get to 285 million bushels, well above this year's slim 150 millbu carryout estimate. Export sales for the week were much better than expected...the market thought there could be net cancellations for the week...and sales were estimated to come in at -200-600 TMT, but were at 835.40 TMT due to strong sales for the next marketing year.
Corn futures are really starting to struggle this morning as the USDA kicked out some pretty neutral numbers for the corn market today. The US is expected to produce a pretty big corn crop on reduced acres this year. The USDA estimated US acres for 2014 at 92 million...but a stout yield number of 165.3 bushels per acre has the production estimate pretty dang high (13.985 billbu) and ending stocks are expected to be at 2.11 billion bushels...well above this year's approx. 1.6 billbu carry out. Usage estimates for corn increased but exports declined due to increased competition out of Ukraine and Brazil. Export sales for the week were just above the low end of estimates that ranged from 600-1350 TMT at 391 TMT. Farmer selling has slowed down some as strong demand has prices higher and farmers waiting for them to climb even further.
Other than the USDA projections, fresh news for the grain markets is pretty scarce. Look for a fairly quiet/lower finish to the week.
Have a good 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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