Drought is maintaining its grip on the Northern Plains states with no relief in sight. In the past week, a larger area of the US sunflower production region has slid into a moderate to severe drought situation with some areas now considered in exceptional drought conditions, the highest category. This has led to market prices heating up for birdfood and at the crush plants. The birdfood prices in some locations topped $20.00 per cwt this week. Birdfood prices have increased about $3.50-$4.75 per cwt since mid-June. Nearby prices at the crush plants have gained $3.40 per cwt since the market low was set. When USDA released its acreage report last month they pegged the harvested acres to decrease 21 percent from last year. Sunflower is very drought tolerant. However, rain will be needed soon as the plants move from the vegetative to the reproductive stage. If drought conditions persist yield reductions in the hardest hit areas of the Dakotas will most likely occur tightening seed stocks. Also, this week, the dollar tumbled to its lowest level in more than a year. The decline in the dollar gives importers more purchasing power and boosts the attractiveness of U.S. products to overseas buyers. This could lead to new export business in the months ahead. Weather and demand news will control price direction from this point onward.
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