SunPrairie Grain Morning Comment
MINOT - Jun 25/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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*Rail Performance Update*
Meetings and presentations with industry leaders have indicated that CP rail performance is not due to improve any time in the near future. This means that we could see slow railcar placements into and throughout harvest, giving us plenty of fresh challenges for making space for new crop grain. Rail placements did improve over the planting season and we were able to open up a lot of space. Currently, we have space available for grain and are offering free DP (as space allows on spring wheat and winter wheat) so that you are able to move your old crop grain out of the bin before harvest (without pricing it), enabling us to get it in and out of our system before harvest as well and keeping space available for new crop. The last thing we want is to be full two weeks into harvest and waiting weeks for railcars. Additionally, we will not be rushing to pile grain. As you are all well aware, grain does not have a long shelf life when it is subject to the elements in a pile. If we do not have consistent freight coming we will not pile grain that cannot get shipped in a timely manner. Long story short - if you're considering hauling grain before harvest please do so sooner rather than later so we have time to ship out old crop and are not sitting full before harvest starts. Please call with any questions. Thank you for your continued business and support!
Market Outlook as of 8:55 AM CDT:
Wheat is up 0-3 cents, chopping around with corn and soybean markets, little fresh fundamental news to guide price direction (Mpls JJuly last trade 6.77, KC July 7.08 ¾)
Soybeans are 1-4 higher, small stocks expected in Monday's USDA quarterly stocks report, however increased US acreage estimates anticipated as well (August last trade 13.59 ½)
Corn is 1-3 lower, market continues downward spiral as it focuses on this year's big crop (July last trade 4.40 ¾)
Sunflowers are down 5-10 cents, bean oil is lagging despite the rise in soybean and soybean meal futures
Canola is up 5-10 cents, futures higher with bean futures, some buying interest
There is not a lot of news for the grain markets again this morning so futures prices are chopping around. It seems the grains are waiting for Friday's StatsCan acreage report and Monday's USDA quarterly stocks and acreage estimates. The US dollar is lower this morning and crude prices are falling off a little bit as well. Look for grain futures to be fairly quiet and have sideways trade in front of these reports. In general the markets are expecting to see increases in acres for row crops from the March intentions estimates.
Wheat futures are a bit higher this morning after trading lower in the overnight session. There's a lack of supportive news to drive prices higher, though, so I wonder how long this little boost will last. Global supplies and stiff export competition provide reason for wheat to want to trade lower. Additionally, winter wheat harvest is expected to pick up as rains ease. Many areas of Europe are expecting to see a bumper crop which will only add weight to prices. Some mildly favorable news is that spring wheat acres are expected to be down from the March estimate of 12 million acres at 11.86 million. However, this estimate is above the March planting intentions estimate of 11.59 million acres.
A tight stocks number is expected in Monday's USDA quarterly stocks report and that is giving soybean prices a little bit of strength this morning. However, good growing weather and high acres will limit gains, especially for new crop contracts. The USDA is thought to report US soybean acres at around 82.15 million, up from the March estimate of 81.49 million and last year's acres of 76.53 million. Also, with greenhouse growing conditions yields are expected to be high this year as well. A concern for the big crop that's coming is the fact that export sales are running well behind where they were at this time last year. This morning's strength may also be partially credited to the rising soybean meal futures market.
Corn futures are just continuing their downward movement, which is not really a surprise with strong acres and favorable weather. Yes, US corn acres are lower than they were last year. However, a great spring and favorable growing conditions have yield estimates much higher than where last year's yields were. This is why corn prices have been working their way lower recently. The USDA is expected to report a higher stocks estimate than where they were at last June. Acres are thought to be reported at 91.72 million versus last year's 95.36 million. Either way, it looks like the US is going to see a lot of corn this year.
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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