Last week sunflower prices were under pressure by increased producer sales to the plants. Nearby sunflower prices had held to levels seen last year and producers took advantage making sales of old crop. After last week’s decline old crop sunflower prices stabilized this week and ended unchanged to up 5 cents with new crop unchanged. Despite the recent downward movement, sunflower prices are still trading above historical levels. A smaller than expected 2018 crop and lower beginning stocks are expected to support prices. There is still time to take advantage of the market opportunities that sunflower can offer as processors are still offering Act of God (AOG) and cash new crop contracts. On the CBoT, soybean prices tumbled as traders expect a big acreage shift as spring planting progress lags in the key corn producing states. Much of the central U.S. is bracing for a very wet week ahead giving traders confidence to begin factoring in more U.S. soybean acres this year from farmers swapping out corn acres. U.S.-China trade woes continue to produce additional headwinds in the soy complex. Adding further pressure is Brazil making a flurry of soybean sales to China over the past few days. The country is harvesting its second-largest soybean crop on record and for the time being fulfilling Chinese demand. In the week ahead, trading will continue to focus on 2019 planting progress, export sales, plus US/China trade situation.
2019 new crop sunflower contracts are available at the crush plants with cash and Act of God (AOG) contracts available. Something else to consider is the oil premiums that crush plants pay on sunflower. Sunflower is the only oilseed that pays premiums for oil content above 40%. Considering oil premiums that are offered at the crush plants on oil content above 40% at a rate of 2% price premium for each 1% of oil above 40%; this pushes a contract with 45% oil content gross return 10% higher per cwt.