CMC - Commodity Marketing Company

Market Update May 2012

Commodity Marketing Company — Wed, 30 May 2012 13:45:24 +0000

It’s been a while since I have posted a market update, so lots of things to talk about this morning. Looking at the major crops, Corn and Beans have been on a steep slide over the last several months. This downturn can be attributed to a number of factors, including a stronger dollar, the prospect of a tremendous domestic crop, and many non-commercial traders pulling their money out of commodities. Barring any major global market or weather concerns, the outlook remains neutral to bearish in the near term.

As for the specialty crops, black oil sunflowers have followed suit, falling to their oil value at the crush. Soybean oil will be the main factor in determining sunflower prices until demand for birdfood picks back up. Millet has bucked the bearish trend, as the stocks on hand have dwindled substantially and pricing has been on a run as a result. We are still about 10-12 weeks from new crop on millet, so be prepared to pay up if you need any in that time frame. Nyjer has been steady to firm as well, although year over year demand is off 60% from 2011 to 2012. It is more from a lack of sellers than anything else, and I expect to see prices cool off in the summer months. Peanuts prices are softening as well; demand has taken a wallop with this year’s higher prices. Relief is in sight though, current new crop prices are about 75% of today’s values.

As for planting progress and new crop outlook, nearly every major and specialty crop is progressing at tremendous pace. Excellent planting/growing conditions have been the story in most growing regions in the US/Canada, and new crop pricing is reflecting high expectations for these crops.

The result of all this bearish news is that many of the bigger commercial buyers are taking a hand to mouth approach to purchasing, which is the right play in this market. It feels like maybe we have all worked our way to one side of the boat though, setting the table for a change in the coming months. Any major global event could send the markets into a fury, leaving everyone scrambling for ownership (think Russia cutting off exports, major drought, Eurozone problems, etc). You know where that story leads…

Birdseed Market Trends February 2012

Commodity Marketing Company — Thu, 09 Feb 2012 18:58:33 +0000

After reading through today’s crop report, I thought I’d send out market update on sunflowers. As many of you are experiencing, the warmer winter coupled with historically
high prices have put a damper on demand for both black oils and most birdfood mixes. Continued pressure from import options are helping keep prices soft, while crush bids are steadily dropping and soybean oil has been weak. The result is that we are finally seeing some substantial relief in oil sunflower prices.

While this is all good news for most folks, there are a couple factors to keep in mind that could put an end to this downward trend. Most importantly, this year’s domestic sunflower crop was one of the worst on record, so despite weak demand, the supply will remain tight until new crop 2012. Additionally, continued dry weather in South America is really hurting crop development there, so global stocks are tightening too.

Many buyers are taking the hand to mouth approach with their purchasing, which looks wise at this point. The million dollar question is when will the short supply catch up with the current demand levels? I’ll do what I can to help you realize that market bottom.

As for a few others, Nyjer will likely firm up as we move into Spring, and
Millet seed prices remain very stable.

Sunflower News December 2011

Commodity Marketing Company — Thu, 29 Dec 2011 19:34:43 +0000

Below is the latest market info from the National Sunflower
Association. Dry weather in South American has sparked the recent rally
in grains. Not a bad time to look at your first quarter needs, while
demand is still relatively slow.

Market Comments

New crop sunflower prices increased 10 to 30 cents this
week. The Cargill plant in Fargo is offering $26.55 for cash sunflowers for
October/November delivery. Cargill is expected to announce AOG contracts at a
later date. ADM Enderlin 2012 prices are $26.15 for cash sunflowers and $24.65
with Act of God protection. ADM Goodland 2012 new crop bid is $27.20 for cash
sunflowers and $26.20 with Act of God protection two weeks ago. New crop
confection contracts are also available for 2012; call your local confection
processor. The market will keep a close eye on weather developments in South
America. If the dry conditions persist the market may add in more weather
premium in the weeks ahead. January is the most critical moisture period for
Southern Brazil. February into March is the key period for Argentina.

Oil sunflowers update from the NSA November 2011

Commodity Marketing Company — Mon, 31 Oct 2011 13:36:30 +0000

As expected, sunflower prices have fallen from the pre-harvest peak. However,
harvest prices remain historically high despite harvest progress approaching
over 50 percent nationally. Prices at the crush plants are $7.00 cwt higher now
than any previous October. This is largely due to the reduced crop size and
strong competition from the bird food and hulling markets. In areas of heavy
prevent plant, farmers have excess-to- unused storage and are likely to let the
market come to them over the next nine months by storing more of the sunflower
crop. On the international scene, the Black Sea region is aggressively crushing
the large sunflower crop. Argentine sunflower plantings may not increase much
due to strong corn prices. U.S. soybean exports have been slow putting a lid on
soybean prices for now. The oil portion of the value of a bushel of soybeans
remains strong.

Oil Sunflower Update from the NSA October 2011

Commodity Marketing Company — Fri, 21 Oct 2011 20:03:49 +0000

According to the latest USDA crop production report, sunflower production will
account for a majority of the increase in global oilseed production this year.
Global production of sunflower for 2011/12 is projected at a record 35.7 million
metric tons, up 887,000 tons from last month. The increase is based on larger
crop estimates for Russia, the EU-27, Turkey, and Argentina. The expectation of
this huge crop has led to a sharp decline in world sunflower seed and oil
prices. USDA gave its first estimate of US sunflower crop prospects in the
report as well. 2011 planted acreage of sunflower was the lowest since 1976.
USDA dropped its acreage estimate by 312,000 acres from the June estimate.
Sunflower yields are also down this year in every state except South Dakota. The
2011 national average yield is forecast at 1,420 pounds per acre, versus 1,460
pounds last year. US sunflower seed production is estimated down by 24 percent
to 2.091 billion pounds. Domestic sunflower supplies are further tightened by a
smaller stock carryover, down 34 percent from a year ago. Given the tight ending
stocks and decreased acres industry members are hoping for above normal yields
to enhance supply for this marketing year. Harvest has begun and early delivery
pressure is starting to affect nearby prices and is expected to continue in the
near term. However smaller beginning stocks and decreased 2011 production should bode well for attractive 2012 new crop price offerings.