Crush plant prices continue to reflect seed supplies that are currently burdensome. Last year’s crop was huge and the 2023 yield is looking to be one of the best as well.
Crop quality remains very good, and yields have been above expectations in most cases. Supplies are big despite smaller planted sunflower acres in 2023. The market needs time to use up the ample seed supply and this is being reflected in the significant price spread between nearby and deferred contracts.
Given the current price scenario a good strategy may be to leave the seed in the bin for now and look at delivering it down the road. Something else to consider is the oil premiums that crush plants pay on sunflowers. Add on the premium for oil content above 40% at a rate of 2% price premium for each 1% of oil above 40% when making marketing decisions.
In the near term, the latest headlines from demand news and El Nino weather conditions in South America will all be attentively watched by Chicago Board of Trade traders. Soybean production in Brazil even with all the country’s weather issues, is still on track to be a record. They are also gearing up for U.S. Department of Agriculture’s annual crop production report that will be released in early January. Sunflower yield, acreage and production will be updated from the October estimates.
With the holiday season upon us trading will probably be somewhat quiet and may trade sideways until after the holidays.
