MARKET DEVELOPMENT
Several Factors Contribute to Pressure on Oilseed Prices
Several Factors Contribute to Pressure on Oilseed Prices
12/12/2014 (Farm and Ranch Guide) - Slower U.S. soybean exports, a higher value for the U.S. dollar and falling crude petroleum oil prices are contributing to a downturn in oilseed prices.
"U.S. soybean exports came in lower than expected by traders and led to a sell-off in soybean contracts," said John Sandbakken, executive director of the National Sunflower Association in the organization's "Week in Review" newsletter.
Adding fuel to that was talk that Chinese crush margins are dropping which could lead to a further reduction in U.S. exports.
Another contributing factor to the downturn in oilseed prices is the fact the U.S. dollar continues to rally giving traders thoughts that a higher U.S. dollar favors competitor's oilseed and product exports versus the U.S.
The third contributing factor is that crude petroleum oil prices have fallen to their lowest level in more than four years.
"Prices dropped after OPEC left output targets at current levels, putting potential supply in a burdensome situation," Sandbakken noted.
"Also, overseas palm oil markets were lower, leaving vegetable oil prices little to rally on," he continued. "This has triggered selling in soyoil which in turn has pressured sunflower prices at the crush plants."
Harvest in the Northern Plains is nearly complete. In North Dakota, 91 percent of the sunflower crop is reported harvested. That's ahead of last year's pace of 86 percent, but behind the five-year average of 96 percent.
South Dakota producers are 95 percent finished with their sunflower harvest, while growers in Kansas have harvested 92 percent of their sunflower crop.
Seed quality in the Northern Plains is reported to be good. Test weight is at 28 lbs; moisture is 9.7 percent; foreign material is 5.6 percent and oil content is measured at 41.13 percent.
Now that harvest is nearly finished, market attention will be shifting to demand news and to crop conditions in South America.
"Planting progress in Argentina is said to be going well," Sandbakken said. "Pressure from the strong dollar and falling crude petroleum oil prices may continue to affect oilseed prices in the week ahead."
As of Dec. 1, local prices for NuSun sunflower for December delivery were $17.90 per hundredweight at Enderlin, N.D. Ð up 15 cents from the week before - to $18 at Fargo. Prices for january delivery were $18.10 at Enderlin and $18.20 at Fargo. New crop prices were at $17.80-$17.90 cash and $17.30-$17.40 with an Act of God clause at Enderlin and Fargo, respectively.
High oleic sunflower prices at Fargo for December delivery were $18 plus premium/buyer's call and $18.20 plus premium for January delivery. At Enderlin prices were $20.10 for January deliver and new crop prices were $19.50.
"U.S. soybean exports came in lower than expected by traders and led to a sell-off in soybean contracts," said John Sandbakken, executive director of the National Sunflower Association in the organization's "Week in Review" newsletter.
Adding fuel to that was talk that Chinese crush margins are dropping which could lead to a further reduction in U.S. exports.
Another contributing factor to the downturn in oilseed prices is the fact the U.S. dollar continues to rally giving traders thoughts that a higher U.S. dollar favors competitor's oilseed and product exports versus the U.S.
The third contributing factor is that crude petroleum oil prices have fallen to their lowest level in more than four years.
"Prices dropped after OPEC left output targets at current levels, putting potential supply in a burdensome situation," Sandbakken noted.
"Also, overseas palm oil markets were lower, leaving vegetable oil prices little to rally on," he continued. "This has triggered selling in soyoil which in turn has pressured sunflower prices at the crush plants."
Harvest in the Northern Plains is nearly complete. In North Dakota, 91 percent of the sunflower crop is reported harvested. That's ahead of last year's pace of 86 percent, but behind the five-year average of 96 percent.
South Dakota producers are 95 percent finished with their sunflower harvest, while growers in Kansas have harvested 92 percent of their sunflower crop.
Seed quality in the Northern Plains is reported to be good. Test weight is at 28 lbs; moisture is 9.7 percent; foreign material is 5.6 percent and oil content is measured at 41.13 percent.
Now that harvest is nearly finished, market attention will be shifting to demand news and to crop conditions in South America.
"Planting progress in Argentina is said to be going well," Sandbakken said. "Pressure from the strong dollar and falling crude petroleum oil prices may continue to affect oilseed prices in the week ahead."
As of Dec. 1, local prices for NuSun sunflower for December delivery were $17.90 per hundredweight at Enderlin, N.D. Ð up 15 cents from the week before - to $18 at Fargo. Prices for january delivery were $18.10 at Enderlin and $18.20 at Fargo. New crop prices were at $17.80-$17.90 cash and $17.30-$17.40 with an Act of God clause at Enderlin and Fargo, respectively.
High oleic sunflower prices at Fargo for December delivery were $18 plus premium/buyer's call and $18.20 plus premium for January delivery. At Enderlin prices were $20.10 for January deliver and new crop prices were $19.50.