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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 10-03-2008 -------------------------------------------------------------------------- http://www.arfb.com Hurricane damage is costing Arkansas farmers. Over the past few weeks, we have seen the damaging effects of the late-season rains on Arkansas grain. In addition to the large amounts of grain on the ground, many crops that had matured just before the rains came have begun to sprout on the head or in the ear. This has caused some producers to face large discounts when they’ve delivered their grains. Reportedly, a few elevators even have stopped accepting grain sorghum because of various quality issues. Corn stocks are up 25 percent from 2007 levels. The hope has been that the September Stocks Report would have offered much-needed bullish news and support prices. However, it did not. Corn stocks were reported at 1.642 billion bushels, well above the average trade estimate of 1.576 billion. The reason for the higher-than-expected stocks was weaker-than-expected feed use in the fourth quarter. Although these stocks still are historically low, they show that demand for corn and other products are weakening. If this slowdown continues, our stocks may rise again next year, given that this year’s crop is the second largest on record. Soybean prices are hit hard by the new Stocks Report. The most recent report provides bearish fundamental news that goes along with the crisis on Wall Street. Traders have expected soybean stocks at around 144 million bushels, but the report actually has shown 205 million. That’s more than 40 percent higher than expected. Again, weaker-than-expected feed demand is causing the higher stocks. About the only bullish news you can find in the soybean market is the Crop Progress Report, which continues to lag well behind the five-year average development. However, the most recent weather conditions have really helped crops across the country. It is unlikely prices will find much support in the short term. However, if we look a little farther out into this winter, we have another battle brewing. Soybeans and corn will begin to fight for acreage, and that should benefit prices. Wheat prices still are weakening and continuing their downward trend. That’s largely because world wheat production is expected to set new records this year. December Wheat Futures have slipped from a high of $12.84 in March to less than $7 currently. Besides the declining prices, wheat’s basis remains at close to $2 under. Historically, $5 wheat would have had everyone excited about this fall. However, given the current input situation, there are few farmers excited about wheat this year. Cotton prices have set new contract lows. The combination of weakening global demand and this nation’s financial crisis has positioned cotton as one of the few commodities setting such lows. December ’08 cotton is continuing to test long-term support levels at 57 cents. As of this writing, however, it has yet to close below that amount. As for next year, December ’09 has fallen below 70 cents. Rice prices are following corn and soybeans lower. We are still waiting to see the USDA’s assessment of the crop damage from the hurricanes. When we get it, the news likely will provide some much-needed support for prices, given the reports we have seen recently. Rice prices continue to trade between $18.30 and $19.69. Cattle prices are on the decline, — and it’s a bad time to sell. Despite large exports in August, Live Cattle prices are still falling. Prices are below $100 a hundredweight for the first time in a couple months. That’s a significant sign that now is not an opportune time to be selling cattle. With cattle inventories in the United States shrinking, cattle prices are likely to rebound in the coming months. Currently, however, they are experiencing the spill-over effect of the nation’s financial market woes. In Dairy, the October Class I price will be $15.53, according to the USDA’s recent announcement of advanced prices and pricing factors. That price is $2.12 less than the September Class I price of $17.65. It also is $6.06 less than a year ago, when the Class I price was $21.59. According to the USDA’s monthly Milk Production Report released Sept. 18, milk produced in the 23 major dairy states totals 14.5 billion pounds for August. That’s up 1.5 percent from a year earlier. Production per cow averages 1,717 pounds during the month, two pounds less than in August 2007. Analysts also have revised July’s milk production to 14.8 billion pounds, 1.8 percent more than July 2007. This revision represents an increase of 12 million pounds — or 0.1 percent — over August’s preliminary production estimate. 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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