Sunflower market escaping volatility so far

While many other grain markets have been dealing with some volatility as they face harvest pressures, that isn’t the case for the sunflower market as crop development is still early, relatively speaking, and harvest is a ways off.

“The markets have been ugly and extremely volatile for most crops since early July,” commented John Sandbakken, executive director of the National Sunflower Association (NSA), in the Aug. 11 NSA newsletter.

“Sunflower prices, on the other hand, have been quietly steady. Nearby high-oleic prices are trading $8.50 to $9.60 per hundredweight higher than last year at this same time,” he said. “Last year, October new crop prices were in the range of $18 to $18.25. October high-oleic prices are currently in a range of $21 to $22 at the crush plants.”

As of Aug. 11, ADM in Enderlin listed a price of $26.50 for delivery in August, $25.20 for delivery in September and $22 for October delivery. Cargill in West Fargo, N.D., listed a price of $26 for delivery of high-oleic sunflower in August, $25.15 for delivery in August and $21.85 for October delivery. ADM in Pingree, N.D., list NQ (No Quote) for August, September and October.

New crop contract prices at the ADM plant in Enderlin were available at $22 cash, and $21.50 with an Act of God (AOG) clause. New crop contracts at the Cargill crush plant in West Fargo were listed at $21.85 cash. ADM in Pingree listed a new crop cash price of $21.50 and $21 with an AOG clause.

“Something else to add to these prices is the oil premiums that are paid on sunflower. Sunflower is the only oilseed that pays premiums for oil content above 40 percent,” he said. “Oil premiums 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. For example, a $22 contract with 45 percent oil content results in a 10 percent price premium which pushes gross return to $24.20 per hundredweight.”

In the meantime, all the markets were anxiously awaiting an updated production report from USDA on Aug. 12 in which they will update yield estimates for the various commodities.

“Aug. 12 will be a huge day for commodity markets as USDA will release its latest supply and demand reports and first report of FSA certified acres. The FSA figures will be compared to the USDA June acreage report and will give the market a better idea of what got planted this year,” he explained. “This data and weather conditions will guide traders in the coming weeks.”

The latest weather news for the next two weeks indicated normal to above normal temperatures were expected in the sunflower-growing region, which will help with crop development.