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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 09-19-08 -------------------------------------------------------------------------- http://www.arfb.com The corn yield is providing the market a boost. The September Report pegged the yield at 152.3 bushels an acre, down from 155 the previous month. That doesn’t sound like a lot. On the aggregate, though, it is 216 million bushels — and it suggests a trend lower is likely in subsequent reports. The USDA has kept resultant ending stocks above 1 billion bushels by trimming feed and residual use 100 million bushels. However, understanding that a stronger dollar, weaker oil and index-fund liquidation all limit upside potential, a seasonal low looks like it may be in place. December’s August Report low of $5.05 looks like solid support. A close above gaps at $5.82 will indicate a probable retest of resistance at $6.25. Weather has not been the best for the southern harvest and might affect yield and quality on a much wider basis. 2008–09 soybean ending stocks are projected to be steady. At this stage, it appears the extra 11.2 million acres planted to beans is just enough to match demand. That suggests both beans and corn will need more acres in ’09. The question is where they will come from. Perhaps some will come from the CRP. Currently, beans as well as corn and cotton, are trading below the USDA’s projected average price for ’08–09. This suggests the market should be near a bottom, and a potential bidding war for ’09 acreage may be looming on the horizon. November futures are testing key support near $11.60 because the market is in a narrow consolidation pattern. A close below $11.57 or above $12.20 will suggest further movement in that direction. The world’s wheat growers are meeting the challenge. Just a few short months ago, everyone was talking about tight stocks, and the market rose to new heights. Wheat has the ability to adjust more rapidly than other crops, since it can be grown year-round in both the Northern and Southern hemispheres. The September Report placed world ending stocks for wheat at 139.87 million metric tons. That’s up from the 136.16 million-metric-ton August projection and the year-ago projection of 118.49 million. It’s also a more-than 21 million-metric-ton increase on a year-to-year basis — and it suggests further pressure on the U.S. market. The Gulf basis has improved, but still remains $1–$1.25 below Chicago Futures and emphasizes the weak demand for U.S. wheat. Next downside support is $6.77 on long-term charts, while December shows support at $6.72. Economic woes are weighing on Cotton. The USDA lowered 2007–08 ending stocks by 300,000 bales, to 9.9 million, lowered exports 350,000 bales and increased its “unaccounted” column 550,000. What this really means is that economic conditions are shrinking world-wide demand. China’s stocks were raised 1.2 million bales, and its import needs were lowered 1 million bales. That, in turn, reduced ’08–09 export projections for U.S. cotton. Use was lower in India, Pakistan and Turkey, as well. Given the worsening economic conditions, the Lehman Brothers bankruptcy and the sale of Merrill Lynch, the market is pushing to new lows. October below 60 cents suggests a test of long-term support at 57 cents. At the same time, December ’09 Futures at 75 cents won’t hold acreage. Rice production estimates are rising, but they don’t reflect the impact of recent weather. The USDA has raised harvested acres and yield projections in the September Report, which has put production at 206.9 million hundredweight. More imports and steady demand have raised projected stocks by 3.4 million hundredweight, most of it long grain. What this report doesn’t reflect is potential wind and rain damage from Hurricanes Gustav and Ike. Nevertheless, the report looks to have capped the meteoric rebound that carried November Futures from $16.20 to $19.69 in the space of 17 market days. The market can stabilize and trade between $18.30 and $19.69 for the time being. In poultry, the Georgia f.o.b. dock-quoted broiler and fryer price for this week’s trading is 88½ cents, based on full-truckload lots of ice-pack USDA Grade A-sized 2½–3-pound birds. Some 79 percent of the loads offered are confirmed within 80¼–89 cents, with a preliminary weighted average of 87.64 cents f.o.b. dock or equivalent. The market is still generally steady and the live supply adequate for a mostly normal demand. Average weights are desirable. The estimated broiler and fryer slaughter is 24,882,700 birds, compared to 25,364,200 last year. Commercial hatcheries in the 19-State Weekly Program set 202 million eggs in incubators in the week ending Sept. 6. This was 3 percent less than a year earlier. Average chick hatchability for the week was 84 percent. Growers in the program placed 170 million broiler chicks for meat production that week, and placements were down 3 percent from a year earlier. Cumulative placements Dec. 30, 2007–Sept. 6 were 6.36 billion, up slightly from a year earlier. 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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