SunPrairie Grain Morning Comment
MINOT - Feb 25/14 - 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 2-5 cents, cannot sustain yesterday's gains, futures only hopes are for technical buying interest to surface (Mpls May last trade 6.55, KC May 6.81)
Soybeans are 4-7 cents lower, speculative selling as ideas that futures are overbought surface (May last trade 13.67 ¾)
Corn is down 2-4 cents, USDA projections for 2014-15 really weigh on futures (May last trade 4.54 ½)
Sunflowers are down 5-10 cents, bean oil struggles this morning with soybean market, pulls sunflowers lower
Canola is unchanged, futures fairly quiet but expect downward pressure with the fall in the soybean complex and crude futures
After a quiet overnight session grain futures are starting the day out much lower. The US dollar is lower this morning and crude futures are falling as well, down about a dollar/barrel. The weakness in the dollar stems from ideas that there will be some negative economic news coming shortly. There is little fresh news for the grain markets today and it seems that most of the action in the futures markets is technical/speculative driven.
The wheat market cannot hold onto Monday's futures gains and is giving up much of what it found yesterday. Spring wheat prices are down about three cents and the hard red winter wheat market is off four cents. Technical buying could surface at any point but for now prices are working their way lower. The US winter wheat crop found some support recently from concerns about winterkill. Now that those have subsided (for the time being) the market is focusing on drought conditions and what impact that could have on the crop. If it's not one thing it's another for hard red winter wheat. Weighing wheat futures down, also, are cancellations of Egyptian purchases of US soft red winter wheat.
Speaking of export cancellations, China has cancelled some of their purchases of US soybeans. The market expected to see some export cancellations as business shifts from the US to South America, so this isn't a huge surprise but not necessarily favorable news either. Yesterday soybean prices saw a pretty good rally, gaining about 15 cents on old crop (only six on new crop futures) and today they are giving back what they gained. There are ideas that the soybean market could have been overbought and I'm sure that sentiment carries into the soybean meal market as well. Thoughts that perhaps declines in South American production were blown out of proportion could be pressuring prices lower as well. Recent rainfall in SA could be slowing logistics as well.
The corn market remains focused on the USDA projections that were released last week. Barring any major production disaster in the US, it looks like there will still be a lot of corn on hand in the US this and next year. That means we could likely expect to see lower prices this fall if all goes well this spring and summer. Exporters continue to say they will not be taking corn with the Syngenta trait MIR162..so the list of available outlets for that corn is diminishing until China says they will accept it.
Unless some buying comes in to get this market excited I think you can expect these markets to have a lower day today.
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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