Sunflower prices are stronger than normal for this time of the year at the crush plants as a late harvest has crush plants searching for seed supplies. In the past two weeks nearby prices are up 55 cents to $1.00 per cwt. with 2020 new crop gaining 40 to 60 cents. Birdfood prices continue in a holding pattern but have seen some upward movement of $1.00 per cwt. in some locations. Last year, harvest pressure and heavy producer selling caused prices to fall with nearby sunflower prices trading in range of $16.60-$16.95 for NuSun and High Oleic at $16.70-$17.70 at the crush plants. That will likely not be the case this marketing year as the sluggish harvest pace and slower deliveries have led to little harvest pressure this year. It is very possible that the market low has already been established and prices will remain relatively firm for the foreseeable future. In the past week, producers harvested an additional 116,000 acres pushing 2019 harvested acres to about 805,000 acres. This represents 66% of this year’s projected harvested acres and is behind the five-year average of 94%. Overall price direction will be determined by export demand news and South American oilseed production prospects in the near term. USDA will release its supply and demand report this week. Traders are anticipating that any significant changes to production, stocks and usage will come in the January report.
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 $18.00 contract increases to $19.80 and the cash $19.00 contract moves up to $20.90.