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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 04/04/2008 -------------------------------------------------------------------------- http://www.arfb.com The USDA has thrown Soybeans a surprising curve. The long anticipated ’08 planting intentions have arrived with great fanfare, and were more than a little surprising. The report’s 74.8 million acres, 18 percent more than ’07, set the already declining market on its ear. Pre-report estimates had been near 72 million acres. If that wasn’t enough, the Stocks Report showed almost 75 million bushels more than expected. Together, the reports pushed bean futures the 70-cent limit lower, with further slides anticipated. Except for a few minor producing states, acreage was sharply higher in all areas. Iowa, up 1.25 million acres, and Nebraska, up 1.2 million, led the rise. Arkansas was up 15 percent at 3.25 million acres. Conditions have changed since the survey was done in early March, and wet-weather flooding may push more acres from corn to beans. November support looks vulnerable at $10.70. Key support at $10 will be the next level. A major high that may stand for some time has been confirmed. 2008 corn acres are falling sharply. Recently released intentions put plantings just at 86 million acres, 8 percent less than ’07. Pre-report expectations were 88 million acres, so corn took the high road and closed up — but not without problems. December pushed above $6, but only briefly as the market sold off and closed at $5.81. This suggested $6 long-term resistance still stands. The market has concerns about the acreage and will respond to any crop problems that may develop, including planting delays, drought conditions, etc. Key support for December Futures starts at $5.40, then $5.20. Rice acreage will change little in ‘08. Overall acreage at 2.77 million is virtually the same as 2007. Slight changes include a 3-percent rise, or 40,000 more acres in Arkansas to total 1.371 million. California and Texas also will increase acreage as Louisiana, Mississippi and Missouri plant less. The mix of long- and medium-grain for the U.S. is unchanged. A 15,000 acre bump in medium grain in California offset a similar dip in Arkansas. Early response to the report was positive, but additional near-term gains may be difficult. Long term, tight world supplies imply greater strength. Demand remains strong, as do international markets. Movement is limited as Vietnam supplies are oversold, India has barred exports, and Thailand is watching developments. Nominal quotes are exceeding $700 a ton. After moving above $20, May Futures might be pressured lower and toward solid support at the recent $16.32 low. Wheat acres are increasing 6 percent. Overall ’08 plantings are 63.8 million acres, with 10.7 million devoted to soft red. That 6-percent acreage rise adds pressure to an already declining market. July Futures are testing trend-line support near $9.40 and look as if they’re headed to support at $8.96, or maybe even $8.30. Like beans, wheat has made a major top that might stand for some time. Key near-term resistance will be $10. The cotton market is moving lower, despite a smaller projected acreage for ’08. The USDA expects plantings of 9.39 million acres this year, 13-percent lower than ’07. The market hopes for even less. This year’s planting intentions show only two states, Georgia and Oklahoma, with more acreage. All the Midsouth states are lower. Declines range from 16 percent in Louisiana to Tennessee’s 40. Arkansas plantings are 24 percent down, at 650,000 acres. Lower export demand and huge stocks don’t provide very bright prospects. Certainly, cotton can’t rally in the face of shrinking soybean and wheat prices. Outside markets are influencing all commodities. Big drops in crude oil signal that index funds are, or will be, rebalancing portfolios. On the upward move, that works to agricultural commodities’ advantage. However, it’s a detriment on the downturn. December will test resistance at the recent 76.34-cent low and likely at the next level, 75 cents. Any rebound will have stiff resistance at 80.61 cents and then at 85. Weakness in the cash market has pushed cattle futures to new lows. Usually, spring brings higher beef values as retailers gear up for the grilling season. Now, however, cutouts are $12 below the winter high. Worries that the economy will affect demand are keeping prices down. April Live Cattle have support at the recent $86.40 low, and the $97.42 new contract low is supporting April Feeders. As this is written, hog futures have gapped to new lows. The USDA Inventory Report is clearly the driving factor, since it pegs the total Market Hogs inventory at 106.6 percent of what it totaled last year. The average trade guess was 105.3 percent. This gives us a pretty clear picture of what the approaching summer looks like. We expect huge weekly kills to continue through the summer months, and keep cash carcass values down. Support on the weekly chart is starting around $54. 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_marketing/email/ ---------------------------------------- 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 2008  |
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