Click here to view this report online.
  |
| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 09-07-2007 -------------------------------------------------------------------------- http://www.arfb.com Wheat is moving to an historic high. It had gone above $8 and made a major key reversal, suggesting a top appearing before Labor Day. Apparently, it was just a “blip” on the radar, since traders pushed the market sharply higher on the first day’s return. Tight world supplies are well documented, but hardly a day passes without another dilemma somewhere pushing importers into seemingly unending panic buying. Recent weeks have brought huge export sales, and September began with limit gains two days running. Labor Day, India bought 795,000 metric tons. Next day, Indiabought 400,00-plus metric tons of mostly U.S. soft red winter wheat. Others are queued up to buy, as concerns rise over Australia’s crop. With futures at historic highs, we have no benchmarks. Growers need to know that markets making such moves often peak, then recede quickly. When planning for ’08, consider new-crop July at $6-plus. Rice Futures are finally using impetus from the bean and grain markets to close higher after weeks of plodding up and down in a narrow 50-cent range. Tightening world stocks — plus a potentially smaller U.S. crop, worrisome ’08 planting intentions and wheat’s strength — all have helped push rice above the $11.05 previous resistance. A food grain like wheat offers opportunity for limited substitution of rice. However, unlike wheat, markets for U.S. rice are rather limited. That may leave the U.S. in a unique position as harvest peaks. November Futures have finished a 62-percent “retracement” of the June–July slide. Still, they seem to have additional upward momentum. The next upside objective will be the $11.58 contract high. Above that is the $12.45 January ’97 high. Support starts at $10.62. Low Cotton prices have triggered consecutive weeks of large export sales, and bargain-basement buying may be just what the doctor ordered. Though the market may not have fully recovered, it appears to be mending. Surges in grain prices have rekindled worry over potential ’08 plantings. No doubt, many producers are eyeing wheat, bean and corn values and seriously considering cutting cotton plantings even more in the coming year. Wheat may be the key. If growers move to wheat, those acres won’t be available for cotton in the spring. So, look for old-crop to grind higher, despite the big ’06 carryover. For now, U.S. cotton is the bargain China and others can’t pass up. December ’07’s initial upside objectives are 62.72 and 64.14 cents. Later, we may challenge the 68.8-cent contract high. Support at the recent low near 57 cents is strong. Look out for December ’08, too, which hit 73½ cents this summer. To hold acreage, it probably needs to go higher. Into September, Soybeans are headed higher. Typically, though, with ’06 stocks nearly 600 million bushels, the market doesn’t rise and the seasonal pattern is lower. Taking its cue from wheat, the market’s broken the $9 barrier again and may challenge the $9.49½ contract high. No doubt, beans will challenge corn for acres in ’08 — but at what price? Be ready to take what the market offers. The trend is up, but it can, and perhaps quickly will, change. Basis will stay wide, since barge availability and high fuel costs have doubled tariffs. Harvest is underway, and this won’t change soon. If the market reverses, November support begins about $8.70–$8.75; longer-term, $8.05–$8.25. Strong demand is providing Corn a solid base. Undoubtedly, the U.S. will harvest a 13 billion-bushel-plus crop this year, which seems ample. However, big export sales indicate it won’t be too much. Future years’ demands will dictate further need for huge crops — and that means corn acrage will remain high. A big crop might dampen market enthusiasm, but not for long. December has strong support at $3.25. Current rebound objectives are $3.65–$3.90, with major resistance at $3.71. In the Dairy sector, Class I use has rebounded strongly due to bottlers building their working school-milk inventories for those schools opening after Labor Day. Some think high Class I and II prices are hurting retail sales. Milk shipments continue further south, whether stair-stepped to Missouri and Kentucky or beyond. Interest has improved as more Class I shipments from cheese plants lessen the milk available for processing. Demand for manufacturing milk is greater than supply, since cheese demand improves seasonally. September ’07 prices under the Federal Milk Order are: Class I, $25.01, up 15 cents; Class II, $22.41 (August), up $1.01; Class III, $19.83 (August), down $1.55); and Class IV, $21.87 (August), up 23 cents. Cattle Futures are sideways to higher. October resistance is $98.55, with December testing at the $101.10 contract high. Strong demand from Labor Day is supporting nearby October. Deferred contracts are gaining strength from significantly lower placements versus last year. That means fewer cattle will go to market this fall. October Feeders are also trending sideways, just below resistance at the contract high of $119.35. Hogs are struggling to find direction amid mixed market signals. Carcass values recently lost more than $2 a hundredweight and pressured nearby futures. The market anticipates a big slaughter through fourth quarter ’07, which may bring weaker prices. However, China may import more U.S. pork to make up for shortages, and that adds some strength to futures. October has key support at the recent $65.67½ low. 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  |
No comments:
Post a Comment