Markets are trading choppy Thursday morning.
At about 8:45 we have corn off a penny, beans off 4 cents,
KC wheat up 3, MPLS wheat up 2, and CBOT wheat up 2. Outside markets have the equities bouncing
with the DOW up 60 points, crude up 50 cents a barrel, and the US Dollar unchanged.
Another news lacking day today; other then export
sales. Which came in at 21 million
bushels for wheat, 5.6 million bushels for corn, and 19.2 million bushels for
soybeans.
Wheat numbers where above expectations as well as what we
need on a per week basis to meet present USDA estimate. The best wheat export sales in 11 weeks.
Beans were also solid over 2 times what we need on a per
week basis with us now up to 919 million bushels of commitments only 2 months
into the marketing year with the US projecting exports at 1.265 billion
bushels; or nearly 73%. Perhaps continuing
to open the doors for the demand number to be moved up. I would note that on the negative side is the
fact that the market was actually looking for a little bit better sales then we
got.
Corn sales were once again horrible and below the low
expectations. So far we are 48% off of
last years commitments at this time.
The USDA did report a sale of 120k tones of soybean to
unknown this a.m.
Wheat basis is a little defensive on the spot floor the past
couple of sessions; both winter wheat and spring wheat with more producer
movement as well as elevator movement with fall harvest winding down. If we want to see basis and flat price firm
up we really will need to good export sales continue as we move forward. We need to get to the point where we actually
see some domestic – export competition.
So far I haven’t seen much if any of our wheat flow to the export
market.
The birdseed market remains very slow; not much interest
from buyers. But producers are not
exactly running to the door to sell either.
I think for that market to stabilize or bounce we need to see a couple
things happen.
First we need to see beans stabilize; which some believe
they have made their seasonal low. If
beans can take off and continue to stair step up that adds support to the crush
market which in turn makes the birdseed market have to pay more. The birdseed market can’t afford to let too
many sunflowers go to the crush from area’s that are suppose to supply the
birdseed or they may have to really pay up later.
Bigger then beans stabilizing will be the actual birdseed
demand. Prices have been a little high
the past couple of years and that has lead to more price increases on the shelves. So we have higher prices which don’t help
demand especially if the economy is struggling and we need to have solid demand
which probably needs to come from a wet snowy winter on the east coast.
If we can see some demand and have beans stabilize move
higher there is plenty of potential for the birdseed sunflower market; but
limiting the upside should be the huge amount unsold sitting in producers
bins. I think there could be more then
ever sitting un-priced just looking for a rally. With all that product overhead a rally to some
of the levels seen the past couple years just might not happen. I do think should demand be strong that the
birdseed market lacks coverage; but they also have no reason to get any
coverage until demand picks up. Bottom
line is demand and bean complex will determine next price move; longer term it
will be a stand off between the buyers and producers………..which have to sell or
buy first.
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you.
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