Time to Check Out '08 Contract Prices
Saturday, December 1, 2007
filed under: Marketing/Risk Management
Strong demand and very competitive cropping alternatives have new-crop sunflower prices well above last year’s levels. Demand for naturally stable vegetable oils such as NuSun® and high-oleic continues to support the oil market. Demand for confection in-shell continues to grow, especially in foreign markets. As a result, ending stocks may continue to tighten for oils and confections.
Like other oilseeds, sunflower prices are projected to set all-time highs this season. Current oil sunflower prices exceed $19 per hundredweight — more than $6 above a year ago. Confection prices are $7 to $8 over last year’s prices at this time.
There are many sunflower market alternatives. The following is a summary of where the contract options stood as of mid-November.
— Confection —Red River Commodities came out in early September with new-crop quotes for confection sunflower. Contracts for delivery to Red River’s Fargo, N.D., plant are being offered at $27/cwt for all size seed production. The Lubbock, Texas, plant is offering a split price contract of $24 for seeds remaining over a 20/64 round-hole screen and $16 for seeds falling through a 20/64 round-hole screen. The Colby, Kan., Red River plant is offering the same type of contract with $30 for the large seeds and $19 for seeds falling through a 20/64 round-hole screen.
SunOpta Sunflower, with offices and processing locations in Breckenridge, Minn., and Goodland, Kan., is now offering new-crop bids as well. Contracts for delivery to the Breckenridge plant are being offered at $27/cwt for all size seed production. The Goodland plant is offering a split-price contract of $30 for seeds remaining over a 20/64 round-hole screen and $19 for seeds falling through a 20/64 round-hole screen.
CHS Sunflower, located in Grandin, N.D. and Hazel, Minn., is offering a full production contract at $32/cwt for their XL confection sunflower for January 2009 delivery. They are also offering a full production contact for their Extreme confection sunflower for $27.50/cwt.
Dahlgren & Company, with processing facilities located at Crookston, Minn., Grace City and Fargo, N.D., announced 2008 new-crop prices for confection, dehull con-oils and dehull black oil sunflower. The prices are: confection sunflower, $27.50/ cwt.; con-oils $23.00/cwt.; and black oil sunflower, $22.00/cwt. Dahlgren is offering storage incentives for later delivery and freight incentives for various locations.
— Oil Sunflower —ADM in Enderlin, N.D., has had a 2008 new-crop price on the board since April 2007, starting at $16.00/cwt. As of this writing, the new-crop price is $19.50/cwt, with an Act of God clause. In April 2007, the ADM crushing plant at Goodland, Kan., came out with a 2008 new-crop price of $16/cwt with an Act of God clause. (This had been adjusted to $17.50 as of November.) Competition for acres with winter wheat in the High Plains encouraged the much earlier-than-usual Goodland announcement.
Technology Crops International is contracting high-oleic acres at $2/cwt over the ADM Enderlin new-crop price. Producers can contract up to 2,000 pounds per acre and are allowed to price portions of their production five times during the course of the contract period. Oil premiums for oils above 40%, plus storage payments, will also apply.
Cargill’s crushing plant at West Fargo, N.D., came out in late September with 2008 bids at $18/cwt for both NuSun and linoleic sunflower. Since that time, new-crop prices for both types have risen to $19.50 with an Act of God clause.
The Arthur Companies, Arthur, N.D., have $21/cwt contracts for high-oleic sunflower.
Colorado Mills, Lamar, Colo., has new-crop quotes of $19.50 for NuSun and $21.00 for high-oleic contracts.
High-oleic sunflower processor High Plains Oil Seed, Etter, Texas, will be coming out with a new-crop price in the near future.
Sunbird, Inc., of Huron S.D., is currently offering a $19/cwt contract for birdfood. Traditionally, birdfood prices in South Dakota have followed the oil crush market at prices equal to or slightly higher than what is offered at the crushing plants.
Additional birdfood contracts are expected to be offered by other buyers as the contracting season progresses.
Crop producers interested in growing sunflower are encouraged to check out their new-crop pricing options at local elevators, as well as with the various companies and processors that contract sunflower. Keep in mind that contract terms and price, as well as the number of contracts offered, can change quickly depending on grower response to new-crop bids.
The best online resource for tracking new-crop sunflower bids is www.sunflowernsa.com/daily-market-news/. You can also go to the ‘Growers’ link on the home page for a list of elevators that buy NuSun, from Texas to North Dakota. -- by John Sandbakken