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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 06-15-2007 -------------------------------------------------------------------------- http://www.arfb.com Soybeans’ volatility remains high. Everyday, the market seems influenced by something different. One day, it’s higher palm oil values; the next, weather in the eastern Corn Belt; then, it’s petroleum values. To say the market is volatile is an understatement. Projected stocks suggest the market is too high, as does overall crop ratings. On the other hand, tightening world vegetable oil stocks and a small U.S. acreage argue for strong prices. A weaker dollar and Brazil’s stronger real further support this and make U.S. beans a better buy. So, the beat goes on, and beans act and react on a daily basis. A recent key reversal signaled a potential market top, but that was negated by another contract high the next day. That, in turn, was followed by big declines going into the weekend. Only minor adjustments are expected in the June Supply-Demand Report and little in the way of market direction. Be aware that the market is overbought and ripe for a setback, with November Futures supported at $8.43 and then $8.23. The next major long-term chart resistance is $9.03. Corn again has backed off resistance at $3.94. September Futures have hit $3.93 or higher seven times over the last 10 weeks, only to be turned lower each time. A close above there will signal a move to $4 or higher and a likely retest of the $4.42 contract high. Good crop condition ratings seem to come into play with each push higher. Any bobble probably will be enough to trigger a move higher. Projected ethanol plant openings suggest a near doubling of corn use for fuel by the end of 2008. That means there is little room for weather losses, and any potential weather situation might send the market higher. Downside, September support is around $3.57, the bottom of that 10-week trading range. Wheat is getting a boost from crop problems. Weather is affecting it in the Ukraine and several other regions around the world. Plus, early returns in parts of Arkansas and the Mid-South look worse than was expected. Thus, July Futures are making an unseasonable move higher. This week’s trading spiked the previous contract high of $5.30, but at this point has failed to close higher. Should that happen, then the $5.57 October ’06 high will be the next upside target. Above that is the ’96 spike high of $7.17. Cotton has consolidated just above 57 cents. December Futures finally topped 57 cents, but have been unable to move significantly higher as this is written. Weather problems — dry conditions in the Southeast and Mid-South and moisture in parts of Texas — are raising concern over this year’s crop. Coupled with higher export interest, primarily from China, these problems have sparked a strong upward trend. A “bull flag” formation in the midst of this move indicates an upside objective of just more than 59 cents. The 60.1-cent March high is also a potential upside objective. Anything above here needs help from additional, and probably prolonged, weather problems. November Rice is hovering around $10.80. Slow exports of milled rice is keeping most mills running well below capacity. However, tightening stocks and a substantially smaller ’07 crop will limit downside price pressure. The international market is steady to firm, with recent Thai quotes tightly higher. This reflects stable movement against old sales. Freight rates remain a key factor and have limited sales activity in Vietnam. Both countries are expected to participate in a large Philippine tender. The next November support is the March low of $10.65. Resistance is every 20 cents, starting at $11 and extending to the $11.58 contract high. Cattle Futures are trending lower. The fundamental situation for live cattle is still bearish. Big cattle supplies and weakness in dressed beef values are adding pressure. High gas prices are taking their toll on consumers’ pocketbooks, too, and as a result, beef is seeing tough competition from lower-priced poultry and pork. Nearby feeders are under pressure from high corn values, but the idea that high corn prices will force production cuts in the coming months are supporting defereds. June’s next support is just below $89. Hog Futures are trading in a consolidation pattern. We expect packers to reduce slaughter operations because of declining margins. Hog supplies are relatively tight, however, and that should limit losses. Higher corn prices are supporting deferred contracts. That is spurring expectations that production will decrease in the coming months. August has resistance at $75.25, the current recent high. Contact: • Gene Martin (501) 228-1330, gene.martin@arfb.com . • Brandy Carroll (501) 228-1268, brandy.carroll@arfb.com . • Bruce Tencleve (501) 228-1856, bruce.tencleve@arfb.com . • Matt King (501) 228-1297, matt.king@arfb.com . -------------------------------------------------------------------------- We promised you your own bank, and here it is - www.farmbureaubank.com Created by members who understand your financial needs like no other bank can. Backed by the strength, stability and leadership of Farm Bureau. Go ahead. See what better banking is all about. Call 1-800-492-FARM Personal Bankers are available Monday - Friday, 7am to 7pm CST -------------------------------------------------------------------------- QUESTIONS OR COMMENTS? If you have any comments or questions about this e-newsletter please e-mail us at: mktrpt@arfb.com -------------------------------------------------------------------------- ---------------------------------------- HOW TO UNSUBSCRIBE You are receiving this newsletter because you requested that your e-mail address be added to the Arkansas Farm Bureau Market Report. To unsubscribe or change your subscription information, go to http://www.arfb.com/commodity/daily_rpt_email.asp ---------------------------------------- QUESTIONS OR COMMENTS? If you have any comments or questions about this e-newsletter please e-mail us at mktrpt@arfb.com Arkansas Farm Bureau Copyright 2007  |
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