SunPrairie Grain Morning Comment
MINOT - Jul 29/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 9:00 AM CDT 07.29.2014:
Wheat is 7-9 lower, US harvest and ample global supply continue to push wheat prices lower (Mpls Sept last trade 6.13, KC Sept 6.17)
Soybeans are down 11-14 cents, technical selling after prices bumped up pretty significantly yesterday (Nov last trade 10.94)
Corn is 5-7 lower, export business skipped over the US, following weaker wheat and soybean markets (Sept last trade 3.62)
Sunflowers are down 5-10 cents, bean oil taking cue from falling soybean and soybean meal futures
Canola is down 10-30 cents, futures sharply lower with crude and soybean complex, broad selling pressure
Turnaround Tuesday? Corn and soybean futures managed to finish the day higher yesterday but today things are looking pretty ugly as selling takes back all of corn's gains from yesterday and about half of soybeans. Wheat futures are continuing Monday's downward momentum as harvest pressure weighs on the markets. Our "outside" markets are considered unfavorable as the US dollar is higher (anticipating good US economic news) and crude futures are getting pummeled, down about 92 cents/gallon at the moment. Crop condition ratings were slightly lower for corn and soybeans this week which you think would lend a helping hand to prices...but that is not the case this morning and the decline in conditions is providing no support at all it seems. Recent dry weather combined with the decline in ratings has some wondering if maybe these grain futures should find some support, but calls for rains are likely easing any concerns.
Reports from the Black Sea Region continue to be of good harvest progress and better than expected yields, which only lets wheat futures drift lower even further. A crop tour for Canada reported fairly average yields with increased yields in some spots making up for the decline in yields in others. Spring wheat ratings remained unchanged at 80% good to excellent, only adding to thoughts that large yields reported in last week's tour could be realized. ND spring wheat is currently rated 82% good to excellent. US winter wheat harvest is also adding pressure to wheat futures as yields, as expected, get larger and larger as harvest moves north. The USDA pegged US harvest at 83% complete.
Technical selling is leading to double digit losses in the soybean complex this morning. Thanks to huge gains yesterday, though, we are still sitting in the positive for price action so far this week. So....yesterday prices shot higher due to reports of sales to China and thoughts of increasing demand...then today the market relaxes because high prices scare off buyers...this soybean market continues to yo-yo up and down pretty drastically. There are ideas that corn seed resistance issues in Brazil could lead to increased soybean acres this year. The US crop is rated 71% good to excellent, a 2% drop from last week's ratings. ND beans are still looking very good, rated 76% g/e. It looks to be a lower day across the board for oilseeds in general today.
There are ideas that those who think the corn crop could exceed 170 bushels per acre are overestimating this year's potential. Many in the marketplace believe that with the nearly ideal growing conditions we've seen across the US this year that the corn crop could yield that high and that has helped to put pressure on prices. However, now some are starting to question that estimate. The official USDA estimate, though, is not quite that high and lies around 168 bpa. Ratings dropped 1% to 75% good to excellent and ND corn is rated 78% good to excellent. The real reason for the drop in corn futures this morning seems due mostly to export business passing on US corn.
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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