Sunflower prices at the crush plants remain stronger than normal for this time of the year as a late harvest has oilseed crushers searching for seed supplies. In the past two weeks nearby prices have rallied with this week adding another 10 to 20 cents per cwt. 2020 new crop prices were unchanged after recently gaining 40 to 60 cents. This week’s USDA December World Agricultural Supply and Demand Estimates report was a non-event for the grain market. The agency’s December report left corn and soybean production data unchanged from its November estimates. This left traders with thoughts that any significant changes to production, stocks and usage will come in the January report. After more than a year of intense negotiations, the White House and Congressional Democrats reached an agreement on the USMCA trade agreement. Having a USMCA agreement in place is great news for sunflower products as oil, meal, in-shell seed and kernel will maintain duty free access to Canadian and Mexican markets. Canada is the largest export market for U.S. sunflower oil and sunflower kernel. Mexico is the second largest export market for U.S. sunflower oil, in-shell seed and kernel. USMCA is expected to be voted on in the House next week, and the earliest it would likely be brought up in Senate for consideration would be in January. Congressional approval of USMCA would return market certainty to these export markets for producers.
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.