SunPrairie Grain Morning Comment
MINOT - Jun 26/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
[cid:image002.png@01CF4CBF.8F6C7CF0]
*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 8:40 AM CDT 06.26.14:
Wheat is 1-3 lower, ample global supply coupled with US harvest pressure pushes wheat prices lower (Mpls Sept last trade 6.71 ½, KC Sept 7.10 ½)
Soybeans are up 7-10 cents, stronger than estimated weekly export sales gives futures renewed strength (August last trade 13.73)
Corn is up 0-1 penny, may turn lower with wheat prices but technical buying interest may give some gains (Sept last trade 4.36 ½)
Sunflowers are unchanged, soybean oil market is fairly quiet, wants to turn lower with crude and canola but supported by higher soybean and soybean meal futures
Canola is unchanged to lower, futures under pressure after trading higher yesterday, market knows canola supply is there but logistics are a mess
The grain futures markets continue to wait for tomorrow's StatsCan report and Monday's USDA report. Ahead of them, trade is choppy and inconsistent as there is little fresh news to guide price direction. Weekly export sales numbers are giving soybean futures a boost but doing little for corn and wheat futures. With a lack of a significant weather threat combined with little fresh news, prices are working their way lower as the day session gets going. There was some buying interest to support prices in the overnight session but it seems that is waning. Crude prices are getting hit hard this morning, down over $1/barrel.
Concerns about the quality of the US winter wheat crop could work to keep prices from falling too much as we move through the next couple of weeks. Untimely moisture could be making the crop susceptible to scab issues and futures are paying attention to that. However, harvest pressure from the far southern winter wheat areas will keep gains from quality issues limited. Additionally, global supplies are more than ample to meet demand and US wheat is not that competitive in the global marketplace. Weekly export sales were all old crop and in line with market expectations that ranged from 300-475 thousand metric MT(TMT). Sales came in at 359.5 TMT...with 0.1 TMT of that being new crop. Ouch. Are buyers going to other countries, seeking cheaper prices for new crop grain? I'd say so. This week is expected to be a quiet week for demand as the few buyers that were looking for wheat are ok for now.
Soybean markets are surging higher as weekly export sales came in better than expected with strong old crop sales...adding concerns to the tight supply situation and giving futures new fuel to trade higher. Weekly export sales were reported at 774.9 TMT (estimates ranged from 250-600 TMT). The sales were a mix but there was just slightly more new crop sold than old crop. So higher we go this morning. Chinese demand has been pretty slow recently and that could keep things pressured...however with slow Chinese demand we are still facing a tight supply situation and that will keep old crop prices supported and this inverse strong.
Corn futures are bouncing around either side of unchanged this morning. Wheat prices are dragging corn lower but bean prices are pulling higher. Corn, obviously, cannot make a decision of its own, especially with the USDA reports coming up Monday morning. Acres are pretty well sorted out and there shouldn't be any major surprises in that regard. However, the USDA has surprised the marketplace a few times on stocks reports and that is where the market will be paying close attention. Weekly export sales were not outside expectations (225-750 TMT) at 553.5 TMT. It was a pretty even mix of old crop and new crop sales.
Look for quiet, choppy trade until Monday morning at about 11:01 AM (reports are released at 11).
Kayla Burkhart
Broker/Procurement
CHS SunPrairie
[image003.jpg]
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
DISCLAIMER: Futures and options trading involve substantial risk. The valuation of futures and options may fluctuate, and as a result, clients may lose more then their original investment. In no event should the content of this website be construed as an express or an implied promise, guarantee or implication by or from the author(s) that you will profit or that losses can or will be limited in any manner whatsoever. Past performance is not necessarily indicative of future results. Information provided on this website is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its staff or its management.
Only active subscribers can read all of this article.
If you are a subscriber, please log into the website.
If you are not a subscriber, click here to subscribe to this edition of the STAT website and to learn more about becoming a subscriber.
