SunPrairie Grain Morning Comment
MINOT - Apr 24/14 - 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 up 7-9 cents, poor US HRW conditions and Ukrainian tension thickens (Mpls July last trade 7.36, KC July 7.58 ½)
Soybeans are -3 to +1, old crop higher on tight stocks, new crop lower on large production prospects (July last trade 14.65 ¼)
Corn is down 1-3 cents, good planting progress expected for the week, market keeps eye on weather forecasts (July last trade 5.07 ½)
Sunflowers are down 0-5 cents, bean oil falling with soybeans
Canola is up 5-10 cents, buying interest supports prices, falling soybeans may limit gains
Effective May 1st the grain markets will have new daily price limits, see the attachment for details. This morning grain futures price action is fairly quiet. The wheat market is performing pretty well but corn and soybeans are slowly falling lower. Clashes between Russia and Ukraine are on the rise and violence is being reported with at least five Russian militants reportedly killed by Ukrainian forces working to get back seized buildings. The market is waiting to hear if there is any disruption regarding exports from the tension occurring in the Black Sea Region. Weekly export sales could help set today's price tone as well.
Poor US crop ratings combined with increased tension in Ukraine is helping to boost wheat prices this morning. There are reports and forecasts for favorable rains to areas of the Midwest but the market seems pretty skeptical about how much they may help - as has been the case for about the last week or so. Europe and Australia are reportedly receiving favorable crop weather which could weigh on futures considering that global supplies are already pretty well set for meeting demand. Weekly export sales were in line with estimates that ranged from 325-900 thousand metric MT(TMT) at 610.8 TMT. It looks like wheat will trade higher today as buying interest is spurred by the US winter wheat crop being in poor shape and violence in Ukraine picking up.
Weekly soybean export sales were pretty poor, with old crop sales being dangerously close to seeing net cancellations. Sales came in at 119.0 TMT, in line with estimates that ranged from 50-725 TMT. The market is very concerned about Chinese demand potential. There are reports of Brazilian shipments switching their destinations from China to the US. So...in addition to US demand having potential to decrease (due to Chinese defaults and declining soybean interest) we could see imports increase as South American supplies come to the US. Increased imports would obviously help to decrease the tight supply situation that we've been seeing lately and could then put downward pressure on prices. News that Argentinean production could be above current USDA estimates does not help prices, either.
The corn market is all about weather and planting right now. Good progress is expected for this week but wet, cool weather is in the forecast and that could delay progress for the end of this week and beginning of next. So corn futures don't really know what to do right now - do they focus on this week's weather and progress or focus on the potential for things to get delayed next week? That being said, prices are down a couple of cents right now. Weekly export sales were pretty good at 1001.8 TMT, at the top end of estimates that ranged from 400-1050 TMT.
It's going to be a fairly quiet day for grain futures as the markets try to decide which are the most important and influential pieces of information to trade off of.
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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