SunPrairie Grain Morning Comment
MINOT - Apr 9/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:15 AM CDT:
Wheat is 3-6 higher, poor US crop conditions versus expectations of higher ending stocks in today's USDA report (Mpls May last trade 7.27 ½, KC May 7.48 ¼)
Soybeans are up 5-12 cents, old crop higher on tighter stock estimate expectations, new crop follows (July last trade 14.72)
Corn is -3 to +1, old crop higher, new crop lower, market choppy ahead of USDA report (July last trade 5.13 ½)
Sunflowers are up 5-10 cents, bean oil is stronger this morning and could work to pull sunflowers higher
Canola is rallying sharply higher up 20-30 cents as buying interest pulls futures markets higher
An unusual thing happened yesterday afternoon for about an hour...the CME had to halt electronic trading (where about 95% of volume trades) due a technological glitch. This happened in the last hour of business as traders were getting their positions evened up before the release of the monthly USDA S&D report. Traders rushed to the floor where traditional hand signals were again used to communicate trades. It sounds like it was pretty chaotic but those veterans of the trade floor had a fun time. Now, of course, this raises uncertainty about electronic trading especially as a cause for the outage has not been determined. Everything is fixed and normal for today and the grain markets impacted were corn and wheat...no clue as to why soybeans were left untouched.
The US dollar is slightly higher this morning and crude prices are down only three cents/barrel. Grain markets are simply waiting for what the USDA has to say in this morning's monthly S&D report (released at 11AM). Rain forecasts seem to be called for areas that don't need it and missing in areas that do.
Wheat futures are expecting to see an increase in old crop carryout estimates in today's report. An increase in carryout could weigh on futures but US hard red winter wheat crop conditions are not good, which could provide some underlying support to prices. The US crop is rated only 35% good to excellent and 29% poor to very poor. The rain that is forecast for major HRW producing areas that are dry is now considered to be "too little, too late" as there are reports of the crop being zeroed out by adjusters in some areas.
The US soybean market is expecting to see an increase in old crop soybean export estimates which could work to decrease ending stocks. However, there could be an increase in the import estimate because buyers are seeking alternate sources for soybeans due to high US prices. South America is a pretty good source as harvest is making beans abundant. Argentinean soybean losses due to extreme wet weather are expected to be pretty hefty so we will have to see what kind of impact that has had on the crop other than just delaying harvest. Soybean oil and canola are both stronger today which will lend support to other oilseed prices as well.
Old crop corn carryout is also expected to see a decline today. However, stocks will still be more than enough to cover demand. Additionally, 2014-15 stocks are expected to be quite high which may limit many gains. Rains and cold weather could further delay planting and lead to concerns about 2014 acreage, though. So stocks for the new crop are really up in the air.
Expect for trade to be fairly quiet and choppy today in front of the monthly USDA report.
Kayla Burkhart
Broker/Procurement
SunPrairie
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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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