As Christmas approached, sunflower producers were receiving a nice present in the form of higher prices. Also, it appears as though the U.S.-Mexico-Canada (USMCA) trade agreement will pass, thus making the start to the New Year look promising.
Since early November sunflower prices have increased around $1 per hundredweight.
“The rally in sunflower prices continues at the crush plants as nearby prices remain stronger than normal for this time of the year,” said John Sandbakken, executive director of the National Sunflower Association, writing in NSA’s weekly newsletter on Dec. 20.
“A late and slower than normal harvest has oilseed crushers searching for seed supplies,” he continued, adding that in the preceding week nearby prices added another 25 to 40 cents per hundredweight.
Looking at prices at the crush plants, NuSun sunflower was listed at $18.75 per hundredweight at ADM in Enderlin, N.D., and $18.80 at Cargill in Fargo, N.D., for delivery in January.
High-oleic prices were $19.05 at Enderlin and $19.10 at Fargo for January delivery. Elsewhere in North Dakota, high-oleic prices for both November and December delivery were $19.20 at Pingree and $18.30 at Hebron.
Not only have nearby prices been rallying, but 2020 new crop prices have also moved higher by around 20 to 30 cents.
At ADM in Enderlin, 2020 NuSun prices are $18.80 cash and $18.30 with an Act of God (AOG) clause. At Cargill in Fargo, NuSun new crop prices were $18.75 cash and $18.50 with an AOG.
High-oleic prices for 2020 new crop were $19.25 cash and $19 with an AOG at Fargo, and $19.30 cash and $18.80 with an AOG at Enderlin.
Also, bird food prices have seen some upward movement gaining 50 cents to $1.50 per hundredweight in some locations.
On the trade front, things were moving forward as well.
“After more than a year of intense negotiations, the U.S. House by a wide margin passed the USMCA trade agreement,” Sandbakken said. “Having a USMCA agreement in place is great news for sunflower products as oil, meal, in-shell seed and kernel will maintain duty-free access to Canadian and Mexican markets.”
The trade agreement is especially good news for sunflower producers as the two countries are major buyers of U.S. sunflower products.
“Canada is the largest export market for U.S. sunflower oil and sunflower kernel, and Mexico is the second largest export market for U.S. sunflower oil, in-shell seed and kernel,” he said.
Sandbakken added that the earliest USMCA would likely be brought up for a vote in the U.S. Senate would be in January where it is also expected to pass.
Over the holidays the markets were expected to be fairly quiet.
“Traders will not make any major moves until USDA releases its next supply and demand report in January,” he said. “The trade is expecting USDA to make some changes to 2019 production, stocks and usage in the market year ahead.”
As he has over the past couple months, Sandbakken noted that producers should consider the oil premiums that crush plants pay on sunflower as it is the only oilseed that pays premiums for oil content above 40 percent.
“Considering oil premiums that are offered at the crush plants on oil content above 40 percent at a rate of 2 percent price premium for each 1 percent of oil above 40 percent,” he said, explaining that this pushes a contract with 45 percent oil content gross return 10 percent higher per hundredweight. The AOG $18.30 contract increases to $20.10 and the cash $19.30 contract moves up to $21.20.