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Sunflower Market Turns Attention to South America

With the 2023 sunflower harvest wrapped up, the market is now turning its attention to South America and what happens with the oil crops down there.

Commenting in the December newsletter of the National Sunflower Association (NSA), John Sandbakken, NSA executive director, said the 2023 growing season was coming to a close with sunflower harvest largely completed across the country, and it remains mostly ahead of historical benchmarks.

“With the 2023 U.S. harvest in the books, traders will increasingly look to South America for price signals in the coming months,” he said. “Soybean production in Brazil, even with all the country’s weather issues, is still on track to be a record.”

Production in Brazil is still pegged at 163 million metric tons (MMT) in the 2023-24 marketing year, according to the U.S. Department of Agriculture’s latest estimates. If realized, that would be up from the previous year’s production of 158 MMT and the highest ever recorded.

Sandbakken noted that in addition, Argentina is expecting “a significant rebound” in soybean production from last year’s crop, which was down due to drought.

“Given the potential of a much larger South American soybean crop, this bears watching as international trade would assume much of the impact and could affect new crop oilseed prices,” he said.

USDA was to release its supply and demand report in early December. Traders, according to Sandbakken, are anticipating that any significant changes to production, stocks, and usage will come in the January report.

“The next big report on the 2023 sunflower crop will come in the January 2024 WASDE (World Agricultural Supply and Demand Estimates) and Crop Production reports, which will feature a final estimate of 2023 yield, acreage, and production,” he said.

“The USDA Grain Stocks report released that day will also provide fresh insights to final 2022-23 usage figures that will determine 2023-24 beginning stocks values,” he added.

Sandbakken also noted that in the final week of November, nearby sunflower prices ended the week unchanged.

Looking at area crush plant prices as of Dec. 4, Cargill at Pingree, N.D., posted a $14.50 call price for NuSun sunflower for delivery in December and No Quote (NQ) for January and February. ADM in Enderlin, N.D., had NQ for both December and January, but a price of $15.85 per hundredweight for February. Cargill in West Fargo, N.D., listed NQ for December, and $15.25 per hundredweight for both January and February.

For high-oleic sunflower, West Fargo listed a price of $16.50 for delivery in December and January. They also listed a 2024 new crop price of $19 cash, and $18.50 with an Act of God clause (AOG). Enderlin posted a price of $16.05 for delivery in December, and $16.65 for delivery in January. They listed NQ for 2024 new crop.

Source : Agupdate