SunPrairie Grain Morning Comment
MINOT - Nov 12/10 - SNS -- Following is the morning comment from SunPrairie Grain, a division of CHS.
Sorry it's late today - we had some email issues at the office!
Opening Calls:
Wheat: 7-12 lower, rain hits winter wheat areas and broad based selling
hits the markets
Beans: 30-35 lower, economic news out of China
Corn: 10-12 lower, follower, selling pressure hitting the market
Yesterday:
Was a fairly uneventful day for the markets. Corn was pretty much
unchanged and wheat trade was two sided and finally succumbing to lower
prices at the end of the day. Soybeans and soybean oil found a lot of
strength during the session and gains in the oil markets were pretty
decent. Sunflowers found forty cents, flax a nickel. Canola was lower
due to a higher dollar. Canola futures did not trade yesterday but
adjustments for a higher US dollar were made.
Today:
Today is looking very, very ugly. Talk that China will work to prevent
inflation by raising interest rates is hammering the soybean complex
this morning on the Chicago Board of Trade and corn and wheat markets
are following suit. Markets are essentially overreacting to the news and
commodities as well as the dollar are getting pummeled. One good thing
to note, though, is that the commodities finished the overnight trading
session well off of their lows of the evening. Crude oil is down 1.43 a
barrel at 86.38, off lows of 85.51. I think things will be pretty ugly
at the opening but hopefully we'll recover a bit once things move along.
Wheat exports were actually pretty decent for the week - coming in at
832 TMT with estimates at 350-500 TMT. Will this help ease concerns
about reaching USDA export estimate goals? It's only one week so we
don't want to get ahead of ourselves but being ahead of market
expectations is never a bad thing when it comes to export sales. Wheat
is being pressured lower by much needed rains falling across the winter
wheat growing areas. However, the areas that needed it most (in Kansas
and Colorado) may not get what is needed to ease concerns. A falling US
dollar will hopefully provide support but who knows how heavy selling
pressure could be.
Soybean export sales for the week were pretty lackluster, especially
when compared to weeks past. Sales were 809 TMT versus estimates of 950
TMT-1.25 MMT. Soybeans are overreacting the worst to recent economic
news out of China, considering that China is responsible for most of the
US soybean demand. A private market analyst released their estimates
yesterday for US 2011-12 soybean acres. They decreased them to 75.8
million acres, anticipating a big switch to corn acres.
Corn export sales weren't too exciting either, but were above
expectations. Sales came in at 573 TMT with estimates at 400-500 TMT.
Informa estimates US corn acres to be an enormous 93.1 million. If that
turns out to be the case, what do you think might happen to corn prices?
Short and sweet today - looks to be pretty ugly, at least to start.
Get out and enjoy the weather - nothing good can come from watching
these markets today!
As always you can reach me at Kayla.Hoffman
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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