The coronavirus is not only a world health scare, but it’s also having a big impact on global markets, including sunflower.
“The coronavirus, which started in China and is now spreading around the world, is affecting global markets,” said John Sandbakken, executive director of the National Sunflower Association, writing in NSA’s weekly newsletter on Feb. 3.
“The disease, plus Lunar New Year celebration in China, have slowed export purchases and pushed soybean prices lower with some spillover weakness in wheat and corn,” he continued. “Traders fear the disease outbreak will lead to slower demand and impact China’s commitment to purchase large quantities of U.S. agricultural products in the Phase One U.S.-China trade deal.”
The sunflower market is also being impacted as nearby sunflower prices ended the week ending Jan. 31 down 10 cents to unchanged. He also noted that 2020 new crop prices for NuSun and high-oleic sunflower were down 30 cents to unchanged.
Looking at regional prices at the crush plants, NuSun sunflower was listed at $19.90 per hundredweight at Cargill in West Fargo, N.D., and $19.80 at ADM in Enderlin, N.D., for delivery in February. March delivery prices were $19.25 at West Fargo and $19.05 at Enderlin.
Prices for 2020 new crop NuSun were posted at $18.75 cash at West Fargo and $18.50 with an Act of God clause (AOG). New crop NuSun prices at Enderlin were listed at $18.70 cash and $18.20 with an AOG clause.
High-oleic prices were $20.10 at West Fargo for February delivery and $20 at Enderlin. Prices for March delivery were $19.50 at West Fargo and $19.30 at Enderlin.
Elsewhere in North Dakota, high-oleic prices for February delivery were $19.80 at Pingree and $19 at Cargill in Hebron. Prices for delivery in March were $19.30 at Pingree and $19 at Hebron.
2020 new crop high-oleic prices at West Fargo were listed at $19.10 cash and $18.80 with an AOG clause. At Enderlin, new crop high-oleic prices were $19.20 cash and $18.70 with an AOG. At other crush plants in North Dakota, at Cargill in Hebron the new crop cash price was $17.70 while the AOG price was $17.45. ADM in Hebron was offering $18 cash for new crop high-oleic sunflower. At Pingree the new crop price was listed at $18.70 cash.
Sandbakken also noted that on Feb. 3, the USDA Risk Management Agency (RMA) was to begin the discovery process in determining 2020 crop insurance price elections for sunflower. According to RMA guidelines, producers have the option of choosing Yield Protection, Revenue Protection, and Revenue Protection with the Harvest Price Exclusion. All three policies have the same price election.
Producers can follow the direction for sunflower price elections by watching the 2020 Chicago Board of Trade’s December soy oil contract during the month of February. Final price elections will be announced in early March.
Elsewhere around the world, he noted that South America continues to make good harvest progress and weather conditions are favorable for producing a record soybean crop.
“In the week ahead, CBoT traders will continue to debate the coronavirus impact on U.S. export demand and South American production prospects,” Sandbakken said.
As he has over the past couple months, Sandbakken noted that sunflower is the only oilseed that pays premiums for oil content above 40 percent. The crush plants offer oil 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 that this pushes a contract with 45 percent oil content gross return 10 percent higher per hundredweight.