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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 04-18-2008 -------------------------------------------------------------------------- http://www.arfb.com Rice mirrors an earlier move in wheat. Like wheat, rice is a food grain, and price appears to be relative when supplies are limited. Internationally, tight supplies are pushing prices to unprecedented levels. Despite stern warnings from Thailand’s government, hoarding and a lack of willing sellers have combined to create an even tighter supply situation. Actual offers are limited, and nominal bids are at $800 a ton or higher. In the U.S., milled bids have reached $825 a metric ton as mills process orders for May and June. Old-crop rice stocks are all but depleted in Texas and Louisiana, which means those states will have to buy in Arkansas to bridge the gap between old and new crop. 2008 plantings are lagging because of rain and flooding, with only 2 percent of the Arkansas crop planted as of April 13. That compares to the five-year average of 26 percent and to 31 percent last year. Futures continue to make new highs almost every day, with November gapping to $20.95 as this is written. Although no signs suggest a top, that might happen at any time. Initial support starts just less than $18. The latest Supply-Demand Report confirms the record pace in corn use. An extra 200 million bushels of feed use more than offsets the slightly slower use for ethanol. The net impact is a further tightening of stocks — now projected at 1.283 billion bushels — and greater concern over this year’s crop. Total use in 2007–08 is now expected to be more than what was produced on last year’s 93.6 million planted acres. Market reaction has pushed December futures to $6.28¾. With the market at historic highs, we have no reference points that suggest just where the market may go. Something like $6.50 or, perhaps, even $7 might be in the cards — and if problems with planting or in crop development arise, it might go even higher. Cotton is continuing its rebound. While fundamentals remain somewhat iffy, cotton is still moving up and away from what seems to be solid support just more than 77 cents. Planting should begin soon if weather permits. Flooding may change some plans, but cotton acreage should be sharply lower again this year — and that provides the only positive fundamental for this market. Supplies will be more than sufficient unless the ’08 crop is a real bust. The recent move by December Futures to just under 90 cents may have set the upper boundary for the near term. Wheat is attempting to hold support near $9. The fact that it’s treading water while corn and beans work higher says a lot. The U.S.’s crop conditions are not the best. However, other areas around the world look to be in good shape. Early reports are that Australia’s crop might exceed that nation’s combined crops of 2006 and ’07. This means we’ll probably experience further downward price corrections. When current support is penetrated, the market will find new support at about $8.30 and then $7.75. You should do any additional crop pricing now. Soybeans are continuing to retrace their February–March decline. November futures have gapped higher than the 62-percent retracement level of the more-than-$4 slide we saw earlier this year. That indicates that further gains may be possible. Previous resistance between $13.10 and $13.50 may cap this move, however. If not, a retest of the contract high might be in order. No doubt, the latest Supply-Demand Report is pushing for additional corn acreage. Beans aren’t going to go away calmly, though. Producers should view November Futures higher than $13 as a pricing opportunity. Live cattle futures have broken out of their recent downward tendencies. Also, beef values have experienced tremendous strength in the most recent weeks — and since retailers look as if they’re gearing up for the grilling season, we expect those values to get even stronger. This is putting packer margins back in the black, and probably will carry over into Cash Cattle prices. June seems to have run into resistance near $92. However, it does now have support at $90.45. Sharply higher corn and distillers dried grain prices currently are limiting feeders. May Feeders are trending higher, but they have resistance at $104.50. In recent weeks, hog futures have gained strength, mostly on carryover from the product market. Pork cut-out values have gained more than $10 since charting an early April five-year low. Export demand is also a factor, since movement is up 55 percent from last year’s levels. Nevertheless, futures are trading at a significant premium to the Chicago Mercantile Exchange Cash Index — and that possibly can limit the market’s upside potential. June has gapped above previous resistance at $72.80. Currently, it’s developing resistance near $75. 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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