Old crop prices for oil sunflower continue to move higher adding 5 to 10 cents per hundredweight this week. On Friday, March 29, USDA will release its March 1 stocks and 2019 planted acres by crop reports. The Prospective Plantings report will provide the initial indication of potential acreage levels for spring crops and will set the tone for production potential as we move into planting season. Most private firms look for corn and spring wheat acres to increase from last year. Private estimates have 2019 soybean acres at around 85-86 million acres. If producers do match this estimate it would be the third largest soybean planted acreage on record. The current soybean/corn ratio is still in favor of soybean and traders are concerned that farmers will not reduce acres sufficiently to prevent a further increase in soybean stocks that will create an even more burdensome level next season. If planted soybean acres reach this level and the US-China trade war remains unresolved it will be a huge drag on soybean prices. Oil sunflower prices have remained steady throughout this winter despite the weakness in other commodities. The 2018 sunflower crop was smaller than expected and good demand has supported prices. New crop oil sunflower prices have also been very firm and near the levels of a year ago with oil crushers offering Act of God and cash contracts. Industry members are expecting oil sunflower acres to show an increase from 2018. Confection sunflower acres are expected to be equal to or slightly higher than last year.
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. The AOG $17.05 contract increases to $18.75 and the cash $17.55 contract moves up to $19.30.