The sunflower market was anticipating there would be fewer sunflower acres planted this year and that’s exactly what the market saw when USDA released its 2021 Prospective Planting report on March 31. The market then reacted favorably with prices rallying with old crop up $1.50-$1.75 and new crop up $1-$1.35.
“Traders are still chattering about last week’s USDA reports, which had producers in seven of the eight major sunflower production states expecting a decrease in sunflower acreage this year,” commented John Sandbakken, executive director of the National Sunflower Association, writing in NSA’s weekly newsletter on April 12.
“The USDA Planting Intentions report kicked off a rally in sunflower prices at the crush plants,” he continued. “Since March 31, sunflower prices have continued to find positive forward momentum on the possibility that lower than expected acres will be planted later this spring.
“Market analysts expect the acreage discussion to continue into the foreseeable future as the battle for acres continues. The March report gave farmers a look at what others are thinking of planting this year,” he added.
Looking at prices at the region’s crush plants, as of April 12, the price at the ADM crush plant in Enderlin, N.D., was $23.40 per hundredweight for delivery in both April and May. At the Cargill crush plant in West Fargo, N.D., NuSun sunflower was listed at $22.95 per hundredweight for delivery in April and $22.85 for delivery in May.
High-oleic sunflower prices were $24.15 at Enderlin for delivery in both April and May and $23.70 at West Fargo, also for delivery in both April and May.
Sandbakken pointed out that crush plants are still offering Act of God (AOG) contracts for fall delivery. Prices for 2021 new crop NuSun sunflower also gained and were posted at $23.50 cash and $23 with an AOG clause at ADM in Enderlin, while at Cargill in West Fargo new crop prices were $23.25 cash and $22.75 with an AOG.
High-oleic 2021 new crop prices at Enderlin were posted at $24.25 cash and $23.75 with an AOG, while the crush plant in West Fargo posted prices of $23.75 cash and $23.25 with an AOG.
Elsewhere in North Dakota, new crop high-oleic prices were listed at $23.65 cash at Pingree, and $22.85 cash at Hebron.
“These ‘fail safe’ contracts have become very popular with farmers throughout the production region,” Sandbakken said. “It provides an opportunity to ‘lock in’ attractive prices now for fall delivery and removes that all important factor of ‘yield risk’ when uncertain growing conditions exist.”
Sandbakken also noted that drought is spreading and intensifying in North and South Dakota and may pose problems for 2021 crops.
“Depleted soil moisture levels suggest yield damage is imminent for some crops. There is still time to adjust your plans to take advantage of the market opportunities that drought-tolerant sunflowers can offer,” he said.
“Late-season planted crops like sunflower can perform well and markets will reward that production. With lower than anticipated acres, diversifying market risk with some oil sunflower acres could be a good option in 2021,” he added.
In the near-term the market will keep a close watch on the weather, as well as planting, and monitoring that progress.