It was a short trading week during the week of Thanksgiving with markets shut down on the day. On top of that, sunflower harvest is also wrapping up. In other words, there wasn’t much action in the market for that week as trading on the Chicago Board of Trade (CBoT) is normally very quiet with low volume during the holiday.
“CBoT traders are concerned about U.S. soybean export demand and a mostly favorable South America weather outlook,” commented John Sandbakken, executive director of the National Sunflower Association in the NSA’s weekly newsletter. “This has led to choppy trade on most days.
“With the USDA November production estimate in the market and harvest wrapping up in the Northern Hemisphere attention will continue to be more focused on demand news and to South America's oil seed production prospects,” he added.
With the slow trading over Thanksgiving, sunflower prices at the crush plants remained steady and little changed. As of Nov. 26, NuSun prices at the Cargill plant in Fargo, N.D., were $16.70 per hundredweight for delivery in December. At the ADM plant in Enderlin, N.D., NuSun prices were $16.55 for delivery in December.
High oleic sunflower prices as of Nov. 26 were $16.50 in Fargo for delivery in December. At Enderlin the price was $16.55 for December delivery.
On the harvest front, U.S. sunflower harvest continues to slowly move along. Most states are trailing the five-year average harvest pace, according to the latest updates from USDA.
In Minnesota, producers reported 98 percent of the crop was harvested. That’s right in line with the five-year average. In North Dakota, 80 percent of the state's sunflowers were harvested, behind the five-year average of 90 percent. South Dakota producers reported that 73 percent of the 2018 sunflower harvest was complete, which is almost 20 percent behind the average of 92 percent.
“Wet and below normal cold weather continues to hamper harvest progress in the largest production area of the Dakotas and Minnesota,” Sandbakken said.
“In the past week, producers harvested an additional 87,000 acres pushing 2018 harvested acres to almost 798,000 acres,” he continued. “This represents 70 percent of this year’s projected harvested acres and is behind the five-year average. Last year at this time 84 percent of the crop was harvested.”
Generally the quality of this year’s crop remains very good. Oil content is 43.6 percent which compares to 42.5 percent last year. Moisture content is measured at 9 percent compared to 9.2 percent a year ago, and foreign material is also lower at 3.6 percent versus 4.7 percent last year. Test weight in 2018 is 31.3 lbs. compared to 30.8 lbs. in 2017.
“For most commodities, producer selling will likely slow down given current pricing unless storage is an issue with the hope of a rally occurring later this year or early 2019,” said Sandbakken, adding that the price discovery period is complete for USDA Risk Management Agency Harvest Prices for revenue insurance policies for sunflower.
“The harvest price per pound for oil-type sunflowers should be 15.5 cents and confection sunflowers at 21.7 cents. The spring prices were 17.5 cents for oils and 23.7 cents for confections,” he continued. “Given the drop between the spring and fall prices producers should contact their local crop insurance agent to see if they are eligible for an indemnity payment due to loss in revenue even if they have reached their proven yield.”
Sandbakken also pointed out that new crop sunflower prices for 2019 are out at the North Dakota crush plants with cash price listed at $17 and Act of God (AOG) contracts available at $16.50 for both NuSun and high oleic sunflower.
He noted, too, that sunflower is the only oil seed that pays premiums for oil content above 40 percent and that is something producers should consider. He explained that crush plants offer oil premiums on oil content above 40 percent at a rate of 2 percent for each 1 percent of oil above 40 percent. For example, a contract with 45 percent oil content has a gross return 10 percent higher per hundredweight. Also, the AOG $16.50 contract increases to $18.15 and the cash $17 contract moves up to $18.70.