2017 crop insurance prices will be announced next week. The price election for oil type sunflowers is expected to be around $18.20 with confections at $27.20 per cwt. This represents an increase of $1.30 for oil type and 50 cents for confections per cwt. versus 2016 price elections. USDA gave the market a generally neutral 2017 outlook at the agency's annual outlook conference this week. USDA projects soybean acres will grow to 88 million acres planted this spring, up 4.6 million acres from last year, while corn planting will be 90 million acres, down 4 million from last year. The corn figure was in line with average trade guesses but soybean was well below with most in the trade thinking that soybean acreage will come in at 90-91 million acres in 2017. Total wheat acres are forecast at 46 million, down 8.3% from last year's 50.2 million acres for a third straight year of declines. USDA expects ending stocks for most crops staying close to this season's estimated amounts. Historically, the March USDA US Planting Intentions report tends to be higher than USDA Outlook Conference acreage estimates. Also, USDA used trendline yields that were below those we saw in 2016, so there is room for more bearish supply increases, should we get another year of good growing weather. The market will use this information until more is known about final planted acres this summer.
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.