For November the sunflower market continued to play follow the leader – that being the weaker domestic and overseas oilseed markets.
“Large vegetable oil stocks and weak Chinese demand are keeping prices on the defensive in the oilseed complex,” said John Sandbakken, executive director of the National Sunflower Association, Mandan, N.D. “Overall ample stocks and production continue to outpace oil demand. This trend is expected to change in the months ahead as crush levels fall and oil stocks shrink.”
The sunflower market got some bearish news on the demand side in mid month when China unexpectedly cancelled some prior purchases.
Also, oilseed prices continued to suffer from the bearish November USDA supply and demand report released earlier in the month.
However, earlier this month a premium developed from December onward encouraging producers to store seed for later delivery. As of Nov. 19 local prices for NuSun sunflower were at $21.55 to $22.20 per hundredweight for November delivery – up 30 cents from the week before, and prices for December delivery were also plus 30 cents at $22.25.
“Palm oil rose slightly from the very low levels that were seen (this month) and that provided some support to oil values,” Sandbakken said.
Overall, however, ample stocks and production continue to outpace oil demand, he noted, adding that this trend is expected to change in the months ahead as crush levels fall and oil stocks shrink.
He also figures weather in South America will be a key factor the market will be watching when it comes to trends on the Chicago Board of Trade.
“Argentine weather is turning drier and should aid planting of oilseeds,” he said. “In Brazil, weather has not been as unfavorable to crop production. Rain has been received in the past week and this has provided some relief from dry soil conditions.
“Traders are factoring in a significant South American oilseed production increase for early 2013. Any drop off in production will be very bullish for new crop values in the U.S.,” he added.
As expected, last week was relatively quiet on the trading front due to the Thanksgiving holiday.