Saturday, September 13, 2008

Sunflower Prices Easing

From the Farm & Ranch Guide:

It was the best of times, and although it's not the worst of times, the sunflower market has seen better days than those of August and September.

Sunflower prices that were soaring earlier this year, have come back down to earth in recent weeks.

Larry Kleingartner, executive director for the National Sunflower Association, said that, according to “Oil World,” world prices of sunflower seed as well as oil and meal have come under considerable price pressure since early July.

Kleingartner stated that warm temperatures and dry conditions in most areas of the region helped the final development of this year's sunflower crop. He also added that much of the sunflower production areas in North and South Dakota and also Minnesota benefitted from a general rain early last week which helped alleviate concerns over dry conditions. However, dryness does persist over a large area of the region.

“Most areas continue to have reasonable levels of soil moisture for this time of year,” he said.

Crop conditions in the region show that 100 percent of the sunflower crop in North Dakota has bloomed, 70 percent has dried ray petals, 19 percent has bracts yellow and 2 percent has bracts brown. In South Dakota, 98 percent of the crop has bloomed, while 45 percent has dried ray petals and 13 percent has bracts yellow.

Kansas' sunflower crop is 85 percent bloomed, 29 percent dried ray petals, and 8 percent has bracts yellow.

The combined good to excellent rating category increased to 58 percent from the previous week's 56 percent rating. The biggest increase occurred in North and South Dakota, while Colorado, Kansas and Minnesota had a slight decrease in crop ratings.

Last year's combined good to excellent rating for the same period was 69 percent.

As of Aug. 31, USDA rated North Dakota's crop at 58 percent good to excellent, 34 percent fair and 8 percent poor to very poor. Minnesota's crop was rated 79 percent good to excellent, 18 percent fair and 3 percent poor to very poor. South Dakota's sunflower crop was 75 percent good to excellent, 22 percent fair and 3 percent poor to very poor.

“At some locations sunflower oil prices have fallen below those of soy oil and rape oil due to increasing selling pressure and sharply higher new crop supplies from the Black Sea region and elsewhere,” Kleingartner said.

One of the most important market factors in the U.S. continues to be Mother Nature and the weather. As a result of the late start this spring, coupled with less than ideal growing conditions this summer, most row crops are behind in development and maturity.

“At the moment there are no frost warnings anticipated in the next two weeks and this has reduced the risk premium that is normally built into oilseed prices at this time of year,” Kleingartner said. “Market forces outside normal supply and demand fundamentals for crops such as crude petroleum prices and the U.S. dollar in foreign currency exchange markets have continued to influence price direction as well.”

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