SunPrairie Grain Morning Comment
MINOT - Jun 30/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:45 AM CDT 06.30.2014:
Wheat is down 3-8 cents, taking cue from a falling corn market, prices lower in front of USDA reports (Mpls Sept last trade 6.88 ¼, KC Sept 7.16 ¾)
Soybeans are 1-4 higher, market expects to see tight old crop stocks in today's USDA report (Aug last trade 13.82 ½)
Corn is 4-7 lower, market focuses on new crop prospects, unfavorable news likely in today's report (Sept last trade 4.35 ¾)
Sunflowers are down 0-5 cents, bean oil slightly lower despite higher soybean and soybean meal futures
Canola is up 10-15 cents, futures higher with soybeans, gains possibly limited by lower bean and crude oil prices
*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!
We're seeing some pretty quiet trade in the grain futures markets this morning as they wait the USDA's Quarterly Stocks and Planted Acres reports, to be released this morning at 11:00 CDT. After the information from the reports has been digested by the markets we will see attention shift back to weather forecasts and new crop prospects. Despite heavy weekend rains in areas of the US, crop weather is still considered mostly favorable. That being said, isolated, heavy rain events will likely lower crop condition ratings in some states. We will probably see ND ratings fall off a bit after the ridiculous rain event we saw this weekend. For what it's worth - the US dollar is lower and crude prices are off about a dime.
Estimates for this morning's stocks and acreage reports are pasted in below. If the USDA reports numbers far off estimates we will see big reactions from the futures prices. The market will really be watching old crop corn and soybean stocks numbers.
DJ USDA Report: Recap for U.S. Acreage, Stockpiles Reports
CHICAGO--The following table of analysts' estimates is provided as a service
to Wall Street Journal subscribers in conjunction with the U.S. Department of
Agriculture's quarterly stockpiles and acreage reports scheduled for release a
noon on Monday.
U.S. Stockpiles on June 1, 2014 (million bushels)
Average Range June 1, 2013 March 1, 2014
Corn 3,724 3,046-4,050 2,764 7,006
Soybeans 387 334-450 435 992
Wheat 603 561-715 718 1,056
**
U.S. Grain, Soybean Planting (million acres)
Average Range USDA 2013 USDA March
Corn 91.787 91.0-92.3 95.365 91.691
Soybeans 82.173 80.5-83.2 76.533 81.493
All Wheat 55.707 54.8-56.0 56.156 55.815
Spring Wheat 11.947 11.2-12.2 11.596 12.009
Durum Wheat 1.787 1.69-1.82 1.470 1.799
-Write to Tony C. Dreibus at tony.dreibus@wsj.com
Wheat futures, from a technical standpoint, are considered oversold and likely due for a correction. However, the global supply and demand situation is not conducive for higher prices as the market knows there's a lot of wheat out there and US wheat is not getting a lot of export business due to heavy competition. Lower corn prices are not good for wheat prices, either, and that is part of the reason futures are drifting lower this morning. More rains to the US winter wheat crop provide fresh quality concerns, but those worries are not being translating to higher futures this morning.
Soybean futures are a little higher this morning but in general the market feels as though the trend is lower. Not only are speculative market participants selling off their purchased positions (pushing futures prices lower) but, also, the US new crop is expected to be major and that hurts prices as well. As I mentioned above, the market will be closely watching soybean estimates in this morning's report from the USDA. If stocks are lower than the 387 million bushels estimated then we could see futures gain on the news, if stocks are above the 387 millbu mark prices will probably be lower.
Corn futures are drifting lower this morning as the market is focusing on new crop potential. Acreage reports are expected, by some, to come in lower than the March planting intentions estimate due to a late planting start in some areas. However, for most corn growing areas weather conditions have been pretty good and the crop is off to a great start. This has prices lower, recently and futures are struggling. There are thoughts that futures are oversold and due for a correction and to start trading higher.
Kayla Burkhart
Broker/Procurement
CHS SunPrairie
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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