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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 11-26-2008 -------------------------------------------------------------------------- http://www.arfb.com Two consecutive days of strong gains suggest that cotton has finally bottomed. March futures made a possible double bottom with two forays below 40 cents. However, they need to close above trendline resistance, around 48.5 cents, to confirm the seasonal low. The rebound will be tedious and slow, dictated by the world economic situation. Producers considering the large LDP should be ready to take action in the near future. To begin this week, adjusted world price rose from 33.21 cents to 34.86 cents. Follow-through on that would suggest a declining LDP, which is 17.36 cents for this week. A weak international market pulled January Rice futures down to the 62-percent retracement objective of $13.12. This means that in just seven months the market has retraced 62 percent of the gain that took place from July ’05 to late April ’08, a period of almost 4 years. The market is back near year-ago levels. January rebounded off the retracement level, but needs to close above $14.60 to suggest a low has been made. Soybeans have made an encouraging upturn. For the last seven weeks, January futures have basically traded in a one-dollar range, from $8.50–$9.50. The few times prices peaked out of that range, they were reversed quickly. Consistent with this trend — Just last week the market dropped to $8.35¼ and looked as though it was headed lower. However, a solid gain at the beginning of this week boosted beans back into that one-dollar range, giving hope of better things to come. Unfortunately, because of big index fund holdings, all the grains seem to be in lockstep with crude oil. If oil goes down, they tend to sell, and vice versa. For now, there are two supporting factors: good Chinese buying and the likelihood of a smaller ’09 crop in Brazil. Corn appears vulnerable. After moving sideways for almost seven weeks, in recent days corn has dropped to the $3.35 support level, then rebounded to fall just short of the previous support level of $3.60. A close above $3.60 would be positive and suggest the market had reached the long-awaited bottom. Despite poor exports and declining feeding opportunities, an improving basis indicates good demand for the amount of corn going to market. Farmers remain very reluctant sellers. Over the last month, December Wheat futures have basically traded sideways, dropping below $5 just once. Encouraged by a weaker dollar, that sub-$5 dip was followed by a strong rebound. Right now, large global supplies are limiting U.S. export opportunities. However, harvest delays in Australia and prospects of a smaller U.S. crop in ’09 are supportive. Lower crude oil values and weak global stock markets have hit Cattle futures hard over the past two weeks. However, in early dealings this week, the market has gapped higher and looks to be confirming a bottom. The market is heavily oversold and trading at a deep discount to cash, so that should give it a boost. In addition, this month the USDA released a positive Cattle on Feed Report, which is also having an impact. The total Nov. 1 inventory showed 7 percent fewer cattle on feed than at this time last year. February has initial support at last week’s low of $83.80, and is currently trading below resistance at $87.70. Hog futures are chopping along, mostly sideways. An improved dollar and general economic weakness have traders worried about the potential for pork exports. Futures are trading at a premium to cash, which is limiting the upside potential of the market. December needs to fill a gap between $56.95 and $57.40 in order to suggest further upward movement is possible. Milk prices are trending much lower than they were a year ago, the result of lower cheese, dry whey and nonfat dry milk prices. The October Class III price was $17.06, declining to around $15.55 for November, nearly $3.70 lower than a year ago. The Class IV price in October was $13.62, declining to around $13.50 for November, about $6.90 lower than a year ago. These prices are not likely to improve any time soon, and could go even lower. For 2009, Class III futures are below $15 through May. Class IV futures are at or below $13 through May. 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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