Increased sales by producers and delivery ahead of spring planting have put nearby sunflower prices under pressure in late-April.
Commenting in the National Sunflower Association (NSA) April 27 newsletter, John Sandbakken, NSA executive director, said that nearby NuSun and high-oleic prices were unchanged to down 75 cents depending on delivery point at the end of April.
“New crop prices were also lower this week, down 30-40 cents as producers are taking advantage of attractive 2020 new crop prices and signing contracts for delivery this fall,” he said.
Looking at regional prices at the crush plants, as of April 27, NuSun sunflower was listed at $19.25 per hundredweight for delivery in May at ADM in Enderlin, N.D., and $19 at Cargill in West Fargo, N.D., for May delivery.
New crop 2020 NuSun prices were $17.45 cash at West Fargo, while Enderlin was offering $16.95 cash and $16.25 with an Act of God (AOG) clause for 2020 new crop.
High-oleic prices were $19.55 at Enderlin for May delivery. At West Fargo, high-oleic prices for May delivery were $19.25.
West Fargo was offering $17.45 for 2020 new crop high-oleic sunflower, while Enderlin’s new crop contract was $17.35 cash and $16.65 with an AOG clause. Elsewhere in North Dakota, new crop high-oleic prices at Pingree were $16.85 cash. ADM in Hebron, N.D., was offering $16.15 cash and $15.55 with an AOG clause.
Planting has gotten underway across the region, and thus far, no major planting delays have been reported. Also, there have been few weather issues occurring in the U.S. as planting progress has gotten off to an average start. Sandbakken noted that traders are expecting good planting progress to continue across the Midwest in the days ahead as cooperative weather continues.
Although sunflower prices have been under pressure of late, it’s nothing like the corn market is seeing as a result of ethanol production declining and ethanol plants shutting down or idling. Feed demand for corn has also declined in recent weeks, pushing local prices below $3.
“With the recent drop in corn prices, some feel intended planted acres for corn may get switched to soybeans instead,” Sandbakken said, adding that USDA’s planting intentions report in March indicated that 83.5 million acres of soybeans would be planted in 2020, which would be up 10 percent from last year.
“Some in the industry feel that planted soybean acres might be closer to 84.5 or 85 million acres given current corn prices,” he said. “If realized, this would be the third highest planted acreage on record and could pressure new crop oilseed prices as soybeans face a plentiful global supply and stiff international competition.
“The potential of increased soybean acres coupled with the unknown impact of the coronavirus on demand leaves the market murky at best in the short-term. Markets will probably trade mostly sideways until more is known later this spring and early-summer,” he added.
In other news, the United States-Mexico-Canada Agreement (USMCA) is expected to enter into force on July 1. U.S. trade representative, Robert Lighthizer, recently notified Congress that Canada and Mexico have taken measures necessary to comply with their commitments under the USMCA. With that notification to Congress, the U.S. became the third country to complete its domestic procedures to implement the agreement.
Having a USMCA agreement in place is great news for sunflower products as oil, meal, confection in-shell seed and kernel will continue to have duty-free access in two of our most important markets, Canada and Mexico,” Sandbakken said.