SunPrairie Grain Morning Comment
MINOT - Oct 9/14 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
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Market Outlook as of 8:55 AM CDT 10.09.2014:
Wheat is down 1-5 cents, profit taking, lack of supportive news means futures markets cannot hang onto recent gains (Mpls Dec last trade 5.64, KC Dec 5.85)
Soybeans are 3-5 higher, not sure why the price increase as harvest looks to make good progress and yields are high (Nov last trade 9.41)
Corn is up 0-2 cents, harvest pressure limits gains, decent export sales may provide some support (Dec last trade 3.44 ¼)
Sunflowers are unchanged, bean oil market is quiet this morning, only slightly higher with the gain in soybean futures
Canola is unchanged, futures markets bouncing around either side of unchanged
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Grain futures are mixed this morning with no real fundamental reason for gains. Futures are going to have a tough time trading higher with the release of tomorrow's Crop Production and Supply/Demand reports from the USDA. We are likely to see upward revisions to corn and soybean yields. Good harvest weather and strong selling with harvest progress will also work to limit gains as we move forward. Weekly export sales were in line with estimates, with the exception of wheat that fell below the bottom end of the estimate range. The US dollar is lower this morning and crude prices are down about 70 cents/barrel.
Wheat futures are having a tough time hanging onto recent gains as profit taking hits the market and prices slide lower. There is some global export business around but I don't think the market expects the US to capture much of it. Weekly export sales came in at 372.4 thousand metric MT(TMT) which was just below the bottom end of estimates that ranged from 375-700 TMT. Basis values look to remain strong through the early winter months as rail issues keep things supported. Additionally, the railroad wants to create a more consistent flow of grain throughout the winter months, keeping shuttles together and things moving smoothly. What this means is that elevators will need more supply to fill these shuttles through the winter, meaning that bids need to reflect that demand and keep basis values supported to encourage grain to come to town when farmers would rather be relaxing poolside or on the golf course in Arizona than hauling grain in -40 degree weather. So while futures values are under pressure look to the basis to provide cash prices some support.
Soybean basis has been relaxing as selling picks up and harvest movement increases. Freight will also be the wildcard in the soybean market and it will be tight, especially with the strong yield reports we have been hearing across the country. The USDA will likely increase its US soybean yield estimates so if you have some soybeans you may want to look at pricing them today as tomorrow could be an unfavorable day for prices if yields are increased substantially. Weekly export sales were pretty good at 901.9 TMT with estimates ranging from 300-1050 TMT. With a range that wide it really is no surprise that sales managed to hit it.
Corn futures are slightly higher this morning in fairly uneventful trade. Brazilian planting is underway and acres are expected to decline this year as farmers switch to soybeans. Harvest weather is turning around in the US and good progress is expected to be made. Yields are still being reported at high levels and as with soybeans the corn market is anticipating an upward revision to the US production estimate in tomorrow's report. Weekly export sales were reported at 784 TMT with a range of 500-900 TMT.
I will be out of the office tomorrow as I head to corporate for meetings so there will not be a morning grain update. Although, by now I'm sure you're used to my inconsistency. Have a great weekend and safe harvest to those of you who are in the field!
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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