SunPrairie Grain Morning Comment
MINOT - Jul 16/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
Market Outlook as of 8:40 AM CDT 07.16.2014:
Wheat is 3-5 higher, following corn prices higher, some profit taking after lower prices yesterday (Mpls Sept last trade 6.35 ¼, KC Sept 6.43 ¼)
Soybeans are up 16-20 cents, favorable Chinese economic data, futures bounce after hitting a 2 ½ year low yesterday (August last trade 12.00 ¼)
Corn is 7-9 higher, hot weather in the forecast, doesn't look to be a threat but the market is running with it (Sept last trade 3.82 ¾)
Sunflowers are up 0-5 cents, bean oil bounces with soybean meal and soybeans, higher crude prices support
Canola is 20-30 cents higher, futures up sharply with bean complex, crude
*Market Texts*
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Grain futures are continuing their yo-yo action this morning as futures are higher to start the day out today. Buying seems to be spurred by those who are purchasing back futures contracts they sold off at higher prices, so it will likely be short lived. There is a forecast for hot weather in the corn belt that has futures higher. Soybeans are bouncing back after falling to values we have not seen in nearly three years. Wheat futures are along for the ride. Crude futures are higher this morning as the market is anticipating a decline in stocks in an upcoming report. The US dollar is higher this morning.
Fundamentally there's not a lot of fresh news for the wheat markets this morning so it seems that prices are taking direction from the row crops which are finding their own strength today. There's pretty conflicting news for wheat prices this morning. On one hand there are reports of quality concerns for the European crop - there is little doubt about the size of the crop but low quality wheat could generate some demand for the US' high quality wheat. On the other hand a couple of different Russian market analysts have increased their production estimates for the Russian crop. Russia produces a lot of wheat so it goes without saying that it's looking like Russia will have more wheat for export than previously expected this year.
China released some economic news this morning that indicated growth numbers were higher than what was estimated. The better the Chinese economy, the more China can buy, therefore the soybean market gets excited about potential for increasing demand from a big customer. Prices are likely also finding a lot of buying interest after hitting lows not seen in a long time yesterday. Prices have already backed off of their highs so I'm not really sure how the day will end, but it most certainly looks to be a better day than it was yesterday. The threat of a dock strike in Argentina as the union workers demand increased pay could potentially interrupt exports, so the market will keep an eye on that. However, it's not exactly uncommon for the Argentinean workers to go on strike.
Corn prices are up this morning as forecasts are calling for above normal temperatures for areas of the corn belt. However, we need to remember that soil moisture is adequate which will help ward off some of the heat. Also, the heat wave is not expected to last long and it would take something major with the weather to get the market extremely concerned about production declines. Corn is getting close to the pollination stage in areas which has the market extremely sensitive to weather and we will continue to see the market overanalyze every single weather forecast that comes out. In addition to above average temperatures forecasts are calling for above average rainfall. It seems to me that the market just wanted a bit of an excuse to trade higher after seeing such hefty losses over the past couple of weeks. Ethanol production numbers are not expected to be too exciting this week as plants enter a seasonal production decline. On the demand side of things - South Korea bought some corn, optional origin.
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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