SunPrairie Grain Morning Comment
MINOT - Apr 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 3-5 higher, Russia/Ukraine plot thickens, keeps markets on edge (Mpls July last trade 7.44 ¼, KC July 7.72 ½)
Soybeans are 2-11 higher, old crop posting double digit gains, new crop reluctantly following (July last trade 14.80 ½)
Corn is up 0-2 cents, choppy end to the week as the market can't decide if it wants to focus on planting progress or weather forecasts (July 5.09 ¾)
Sunflowers are unchanged, bean oil movement fairly quiet so far this morning
Canola is up 5-10 cents, slight buying interest in the canola market after posting some hefty losses this week
The US dollar is lower this morning and crude prices are being sold off heavily, down about $1.20/barrel at the moment. Grain futures, though, are higher as we head into the weekend. Russia says that Ukraine will "face justice" for the killing of pro Russian rebels earlier this week. Other nations are looking to increase sanctions on Russia in order to prevent things from escalating further. Grain markets are waiting for a disruption of exports, thus seeing prices trade higher. The corn market, in particular, is waiting to see what the USDA will report for planting progress in Monday afternoon's report.
The US hard red winter wheat crop conditions tour is to take place next week and will help assess freeze and drought damage. Many spots of the crop have been written off and the market will look pretty closely to what the tour has to say. However, some of the damage has been priced into the market already. So if damage comes back better than expected prices could fall, if damage come back worse than expected than prices will find some support. As I said above, the market is also waiting to see if any disruptions to exports will take place in Russia and Ukraine due to the tensions there. There are reports of expectations for decreased Canadian spring wheat acres due to the logistical nightmares we faced this year. However, logistics have been a nightmare everywhere so I'm not sure what Canadian farmers will seed instead of spring wheat in hopes for quicker rail movement.
So US supplies of soybeans are tight, we know that. However, estimations for Chinese defaults on soybean shipments continue to increase and that creates worries about further demand from China. Also - shipments of soybeans to the US are on the rise as well. We may just find a way to manage this tight soybean supply situation without prices rising too much further. Gains have already backed off their highs and since I started writing about ten minutes ago, new crop prices have started seeing losses. Some fairly big news is that Brazilian transportation costs are expected to decrease with the building of a river terminal that will give soybeans quicker and easier access to the marketplace. This will help make Brazilian soybeans even more competitive in the global marketplace. Also - where one terminal opens and succeeds will result in others following.
The corn market is just chopping around, waiting for Monday's crop progress number. Corn futures know that good planting progress was made across much of the corn belt this week. However, the market is also looking forward and seeing that weather is supposed to be cold and rainy this weekend and next week, delaying further progress. So futures are bouncing around as prices struggle to decide on which news to pay most attention to. One good thing is that US export demand remains fairly strong, with sales continuing to exceed what the market estimates.
Have a great weekend!
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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