Sunflower price direction will be set in the near term

The U.S. and Mexico reached a preliminary NAFTA trade pact a week ago, and the Trump administration gave Canada until the end of the week to resolve outstanding differences on a new NAFTA deal. Both U.S. and Mexican officials have vowed to press on with their deal even if Canada can’t resolve differences with the U.S. Having a NAFTA agreement in place would be good news for sunflower products as oil, meal, in-shell seed and kernel have duty free access in Canada and Mexico. Canada is the largest export market for U.S. sunflower oil and sunflower kernel. Mexico is the second largest export market for in-shell seed and kernel. Nearby seed prices at the crush plants continue to trade close to the 60-day moving average. Mid-August through September is the critical time frame for sunflowers. Buyers will be anxiously watch crop production prospects before making longer term purchases. 2018 U.S. sunflower production is still undetermined and will not be known until this fall. In its first estimate, USDA pegged U.S. sunflower production to decrease 4 percent in 2018/19 to 2.08 billion pounds. Most of the reduction is anticipated for non-oil type sunflower due to lower planted acres with oil-type production virtually unchanged. In October, USDA will provide an updated estimate for oil and non-oil sunflower production. These reports and demand news will set the tone for new crop sunflower price direction in the near term.