Next Friday, USDA will release its March 1 stocks and US 2017 planted acres by crop reports. Some industry members are expecting oil sunflower acres to show a decrease from 2016. Confection sunflower acres are expected to be equal to or slightly higher than last year. Most private firms look for corn and wheat acres to decrease with soybeans showing a large increase from last year. On the CBoT, the South American soybean harvest continues to weigh on the market. A recent private estimate put Brazil's crop at 111 million metric tons. USDA is at 108 million. The Buenos Aires Grain Exchange has raised its estimate for Argentina soybeans to 56.5 million metric tons from 54.8 million. USDA is at 55.5 million. The lower prices have subdued farmer selling, which has tightened supplies in cash markets. Market bears feel the large South America 2017 supplies will eventually push soybean prices lower. The terrorist attack in London near the British Parliament building added to market anxiety. There are also worries that President Trump will be unable to accelerate economic growth and those concerns have fueled fund selling. Soyoil values rallied with the 2017 RFS volume mandate taking effect this week. The rule puts in place a 15-billion-gallon conventional biofuel requirement, the maximum allowed under the law. Trading in the week ahead will mainly revolve around the upcoming USDA reports plus South American harvest progress and impact it might have on US exports.
New crop sunflower prices are out 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.