A bearish WASDE report (World Agricultural Supply and Demand Estimate) in mid-July pressured sunflower prices lower along with a number of other commodities.
“Sunflower prices followed a wide range of other commodities, including corn, wheat, and soybean lower after the release of a bearish USDA World Agricultural Supply and Demand Estimates report this week,” commented John Sandbakken, executive director of the National Sunflower Association (NSA), writing in NSA’s weekly newsletter on July 18. “Adding further pressure to seed prices are sharply lower vegetable oil prices.”
As of July 18, nearby NuSun prices at the ADM crush plant in Enderlin, N.D., were listed at $29 per hundredweight for delivery in August. At the Cargill plant in West Fargo, N.D., the August delivery price for NuSun sunflower was $28.50 per hundredweight. That’s more than $11 lower than the highs earlier in June.
Looking at 2022 new crop cash and Act of God (AOG) contracts for NuSun sunflower, the ADM plant in Enderlin was offering $27.35 cash and $26.65 with an AOG clause. Cargill in West Fargo was offering $26.40 cash for new crop NuSun sunflower.
High-oleic sunflower prices were $34.50 for delivery in August at both the Cargill plant in West Fargo and at ADM in Enderlin.
New crop high-oleic sunflower contracts were $28.355 cash and $27.65 with an AOG at Enderlin, while West Fargo a cash price of $27.65.
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Elsewhere in North Dakota, the crush plant in Pingree listed a new crop high-oleic cash price of $28.05 and Hebron listed a cash price of $27.35.
In the WASDE report, the U.S. Department of Agriculture reduced its estimates for 2022 soybean production based on lower acreage reported in the June 30 USDA Acreage Report.
“The report surprised traders as USDA increased old crop soybean stocks and cut 2022-23 soybean usage rates significantly, even though 135 million fewer bushels are expected to be harvested from this year’s record crop,” he said.
“After digesting the figures, some traders think we are starting to see USDA increase expectations for more buyer hesitancy amid a looming global recession and high commodity prices that could drive down oilseed prices further,” he continued.
“There are also thoughts in the market that high soybean prices are likely to drive demand destruction in the new crop marketing year, with the export market taking the biggest hit,” he added.
Sandbakken noted that U.S. exports have become a less desirable option on the global market because of a surge in the value of the U.S. dollar as a global safe haven asset.
“Outside markets, primarily central bank interest rate adjustments and inflation have added to the bearish tone,” he said.
In the near-term, Sandbakken pointed out that weather conditions as of mid-July were mostly favorable for sunflower development in the tri-state region of North Dakota, South Dakota, and Minnesota. He expected the latest supply and demand figures from USDA would guide market direction in the short-term.