SunPrairie Grain Morning Comment
MINOT - Jul 15/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:32 AM CDT 07.15.2014:
Wheat is down 2-5 cents, spring wheat ratings stay steady, follow corn and soybean prices (Mpls Sept last trade 6.37 ½, KC Sept 6.43 ¾)
Soybeans are 8-22 lower, old crop getting hit hard, new crop following, market knows a crop is coming and worries less about old crop supply (August last trade 11.74 ¾)
Corn is down 5-7 cents, crop ratings improve, lack of weather threat (Sept last trade 3.74 ¾)
Sunflowers are 5-10 cents lower, bean oil following sharply lower crude, canola and soybean prices and sunflowers fall accordingly
Canola is down 10-20 cents, selling pressure with lower bean complex and crude
*Ultimate Plot Tour*
Please join us for the Dakota Agronomy Partners Ultimate Plot Tour tomorrow afternoon, one mile west of the Renville corner on the north side of Highway 5. The tour starts at 2:30 (registration is earlier) and will cover sunflowers, corn, soybeans, wheat and canola as well as grain markets. We hope to see you there!
And the sellers are back! Grain futures are lower again this morning after taking the day off to trade a little higher yesterday. Outside markets are unfavorable as the US dollar is higher in front of Janet Yellen's speech this morning and crude futures are sharply lower (down about $1.15/barrel) as they fall with Brent crude prices and easing concerns regarding the Middle East. Crop conditions remained steady and that is putting more selling on the futures markets this morning. An absence of a weather threat also works to push prices lower. There are hopes for more demand due to reduced prices, however it seems that buyers are anticipating prices to fall even further before making purchases.
Wheat futures are falling this morning in sympathy with lower row crops and an overall unfavorable supply situation. Russian harvest has begun and is slightly behind last year due to untimely rains. Russia has been providing tough export competition as they offer out wheat at prices that are lower than what the US is offering, eating up some demand. Spring wheat cent with ND spring wheat still rated very strong at 70% good to excellent with ND spring wheat still rated very strong at 82% g/e. The market seems to have factored in the poor quality hard red winter wheat crop that the US is producing this year. Some areas were completely written out but what I'm gathering is that even though this year's crop is not nearly as good as what we expected when it was planted, that it's still doing better than last year's crop. Additionally, other areas of the world are able to make up for the US hard red winter wheat production problems. US winter wheat harvest is 69% complete as of Sunday evening, according to the USDA.
Barley is rated 64% g/e with ND barley rated 80% g/e. Barley is 83% headed which is well ahead of the average pace, but ND barley is just about on pace at 66% headed.
Soybean condition ratings remained unchanged at 72% g/e this week, ahead of last year's ratings. ND beans are rated 78% g/e as growing conditions remain overall pretty decent for now. News that China sold off very little of its most recent soybean auction could be unfavorable for demand. However, there were reportedly some quality problems with the soybeans offered that could have kept buyers on the sidelines. Old crop soybeans are currently down nearly 30 cents at the moment as selling pressure hits futures hard. The market is slowly chipping away at the inverse between old and new crop soybeans (meaning old crop prices were a lot higher than new crop - and now the difference between the two is narrowing) by selling off old crop bean futures at a faster rate than new crop. I've talked to a few people that do not have any new crop beans locked in yet...please consider locking some in if you are comfortable doing so. I do not think that new crop soybeans will be in the double digits if this crop comes as expected.
The corn market is lower again today as the USDA increased crop condition ratings, keeping them at the highest levels we've seen in 20 years. The USDA pegged the US corn crop at 76% good to excellent which is up 1% from last week. ND corn is rated 79% g/e. Overall weather forecasts are not threatening and that only adds weight to prices. There are some forecasts to watch and the market is overanalyzing any bit of weather information, which is pretty typical when we're in a weather market. Demand is quiet as buyers stand by and that only lets prices drift lower even further.
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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