SunPrairie Grain Morning Comment
MINOT - Jul 17/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:35 AM CDT 07.17.2014:
Wheat is up 0-3 cents, hard red winter wheat higher, spring wheat unchanged, not much supportive news (Mpls Sept last trade 6.28 ¾, KC Sept 6.40 ¾)
Soybeans are 0-2 lower, export sales near low end of estimates, futures relaxing after yesterday (August last trade 11.93)
Corn is up 0-2 cents, there must be some buying interest somewhere but there is not any favorable news to justify higher prices (Sept last trade 3.80 ¾)
Sunflowers are unchanged, quiet bean oil market today despite rising crude oil futures and soybeans
Canola is down 10-20 cents, futures gaining some momentum with crude and beans but are mostly lower, pulling cash prices with
Grain markets are mixed this morning in what looks like pretty directionless trade. There's not a lot of fresh news out this morning, either, which only adds to the uncertain direction. Crude prices are sharply higher this morning as a lower than expected stocks number was reported. The US dollar is lower - which is generally viewed as favorable for grain prices. Export sales were in line with estimates and not too exciting but could be helping out futures a little bit this morning. There is some nervousness in the market regarding increased sanctions on Russia from Europe and the US. Above normal temperatures and rainfall that are forecast are not having any major impact on prices right now.
Wheat futures should be struggling a bit as market analysts increase their estimates of the European Union crop size. As I mentioned yesterday, though, there are concerns about the quality of the crop. Therea re thoughts that US wheat continues to miss out in export markets despite the recent price decline. That sentiment is probably accurate if this week's export sales numbers are any indication. Weekly export sales came in at 320.7 thousand metric MT(TMT), just above the low end of estimates that ranged from 300-600 TMT.
There is chatter about China investing in Brazilian infrastructure. China has previously invested in South American infrastructure in an effort to improve logistics and movement of the crop to the marketplace. The Argentinean port strike is gaining momentum as grain inspectors and port workers are wanting higher pay. Truck drivers will reportedly join in on the strike on Monday, potentially causing further snarls to logistics. Weekly export sales were near the low end of estimates that ranged from 450-975 at 598.7 TMT. I think the market is mostly just excited that old crop export sales were not negative. Today old crop futures are leading the way higher and reluctantly pulling new crop along.
Yesterday I saw an estimate for the US corn yield...at 171 bpa...which is 3 bpa higher than the current estimate. Many in the marketplace are talking corn yield at 170+, which will only continue to weigh on prices and have the market watching weather. Pollination conditions are considered to be "ideal" and the hot weather that's in the forecast is not expected to have any major, negative impact on the crop. China sold some corn from its state reserves but much of it went unsold which raises some questions about demand. Weekly export sales for corn were actually pretty decent at 1068.7 TMT, near the high end of estimates that ranged from 600-1150 TMT.
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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