sunflower field (03/21)

While most other grain commodity markets have shown some weakness over the winter months, that’s not been the case with sunflower which has remained steady.

“Old crop prices for oil sunflower continue to move higher adding 10 to 25 cents per hundredweight this week,” according to John Sandbakken, executive director of the National Sunflower Association, writing in NSA’s weekly newsletter on March 18. “Oil sunflower prices have remained steady throughout this winter despite the weakness in other commodities.”

Old crop NuSun prices at the Cargill crush plant in Fargo, N.D., were listed at $17.45 per hundredweight for delivery in March on March 18, and $17.60 for delivery in April. At the ADM crush plant in Enderlin, N.D., NuSun prices for delivery in March were $17.20 per hundredweight and $17.40 for delivery in April.

High oleic sunflower prices for March delivery at both Fargo and Enderlin were $17.45, and $17.60 for delivery in April.

Sunflower’s good performance over the past several months can be attributed to the facts that the 2018 U.S. sunflower crop was smaller than the previous year and there has been good demand. Those two factors are helping to support seed prices.

While old crop sunflower prices have been steady, new crop prices are also a positive for growers, according to Sandbakken.

“New crop oil sunflower prices have also been very firm and near the levels of a year ago with oil crushers offering Act of God and cash contracts,” he said. “New crop cash prices are in a range of $16.75-$17.25 for NuSun with high oleics at $17.25-$18 at the crush plants.”

While old crop sunflower prices have remained steady, Sandbakken pointed out that producers should also consider the oil premiums that crush plants pay on sunflower.

The crush plants pay premiums on oil content above 40 percent at a rate of 2 percent price premium for each 1 percent of oil above 40 percent, he explained. This pushes a contract with 45 percent oil content gross return 10 percent higher per hundredweight and would raise the value of a $18 base contract to $19.80.

As mentioned earlier, other commodities have struggled over the winter, including the oil market, in particular soybeans.

“Most fundamental news for oil has been negative the past few months putting CBoT (Chicago Board of Trade) soybean oil contracts on the defensive,” Sandbakken noted. “The cold weather in the U.S. this winter drove crush demand for soybean meal and pressured CBoT soyoil contracts as oil stocks started to build.

“Market analysts think this trend will reverse into the spring and summer months with oil prices strengthening as meal demand tapers off. Last year sunflower seed prices hit the market high in June-July,” he concluded.

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