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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 04-03-09 -------------------------------------------------------------------------- http://www.arfb.com Soybeans got a few bullish surprises in the March 31 USDA reports. First, while pre-report private estimates had been averaging 79.25 million acres (some ranging as high as 81.5 million), USDA pegged the number at 76 million, well below expectations. In addition, the quarterly grain stocks report placed soybean stocks at 1.3 billion bushels, 132 million less than a year ago. Last year’s ending stocks were 205 million bushels, which means if this year’s utilization doesn’t slow significantly, ending stocks will be well below the March projection of 185 million bushels. Both of these developments should push prices higher over the next few weeks, at least until the market is satisfied that enough additional acres have been pulled into beans. Look for November to challenge resistance at $9.13, then $9.58, and maybe even $10.39. USDA has projected corn plantings at 85 million acres, which is 1 percent lower than last year but higher than pre-report estimates. At the same time, quarterly stocks are at 6.958 billion bushels, 100 million above year-ago levels but below most pre-report estimates. These two corn reports should offset each other. The current price ratio (November beans to December corn) is just over 2-to-1 and definitely favors corn as the planting intentions indicate. Because of this, beans will likely work higher as corn tries to hold acres. Weather could soon come into play as wet conditions impede field work and slow preparation for corn planting. Rain was a major factor in last year’s yield. Look for the market to work toward a 2.1-to-1 or 2.2-to-1 price ratio. September support is near $3.65; resistance is just above $4.55. The upside depends on weather and soybean strength. Wheat remains in a sideways trading pattern. In the planting intentions survey taken earlier this month, producers indicated they would plant only 13.3 million acres in spring wheat this year, down a million from 2008. In addition, this survey was taken before the flooding in the Northern Plains. By some estimates, that could reduce plantings another half million acres. That would put total wheat at around 58 million acres, down about 5 million from last year. Upside potential is still limited by poor exports and large world supplies. July support near $5 could be tested. It will take a confirmation of yield problems to push the market back toward the recent high of $5.73. Cotton plantings are down for the third year in a row. The recent USDA report projected U.S. plantings at 8.81 million acres, which is down 7 percent from last year but higher than most pre-report estimates. Arkansas is expected to plant 520,000 acres, down 16 percent from last year. More than 53 percent of the 2009 crop will be in Texas, which suggests abandonment might be high again this year. Despite the fact USDA’s number exceeded expectations, it appears traders are looking to other markets for direction. A December close above 50.5 cents could bring a test of 52 cents and, eventually, resistance at 57 cents. USDA projected that 2009 domestic rice acreage will be up 6 percent from last year. Of the total 3.18 million acres, 2.53 million will be long grain. Total plantings in Arkansas are projected to be 13 percent higher than last year. The state’s long grain acreage is projected at 1.43 million acres, up 9 percent. At 160,000 acres, medium grain is up 60 percent. Missouri is also expected to be up 13 percent from last year. Texas, Louisiana and Mississippi should increase acreage by 2–4 percent. The report had California plantings down by 8 percent. Futures will likely remain in the current trading ranges: $12–$13 for May; $11.50–$12.50 for September. Live cattle futures continue to move sideways, not venturing far from contract lows. The good news: Seasonal demand should be picking up soon. The bad news: Despite a significantly lower number of market-ready cattle, supplies are still high because heavier cattle are coming to market. Packers are still operating in the red. It seems the market has more high-grade beef than it wants or needs right now. Feeders are also locked in a sideways pattern, but aren’t challenging contract lows. May has support around $90.60. Hogs are also being plagued by demand concerns. In recent days, as the market’s been waiting for a seasonal increase in demand, futures have been selling at a big premium to cash prices. However, packers haven’t stepped up their buying. Futures have seen erratic price action in recent days, but for the time being, June is holding key support at the contract low of $69.65. 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 2009  |
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