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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 05-01-2009 -------------------------------------------------------------------------- http://www.arfb.com Fear that swine flu would reduce demand for animal feed put soybeans on the defensive and, ultimately, was responsible for big losses. However, the market seems to have gotten past that initial scare and appears ready to resume trading on more pertinent factors. Slow corn plantings in some areas of the Midwest are raising concern about the potential impact on soybean acreage. No doubt, the market has bought some acres already and further delays could ramp bean plantings up to 79–80 million acres. That would put the crop in line with private estimates that came out before the March planting intentions report. Technically, swine flu elicited a “gap lower” decline and put November in position to test trendline support around $9. Below that is the recent low of $8.38. On the upside, resistance at $9.50 is strong. Corn remains locked in a 50-cent trading range. It also suffered a decline following the swine flu reports, but it was moderate. Slow planting progress was supportive; however, weakness in crude oil and a stronger dollar continue to weigh on corn. September futures are trading between $3.75 and $4.25. Additional support is seen at $3.63 and $3.38. Resistance at $4.25 will be difficult to penetrate without serious weather problems. Wheat’s upside is limited by huge U.S. and world stocks. Recent events pushed July futures toward support at $5.15–$5.10. Slow export sales continue as the market remains very competitive. As of now, not even weather concerns have given the market much bounce. Spring planting delays seem to be the most supportive factor. However, freezing is still a possibility through early May, so weather could still have an impact. The April 6 high of $5.80 is major resistance. The December 5 low of $4.98 is major support. Cotton continues to climb on good technical support. December futures have moved persistently higher for the last seven weeks and have come within 50 points of the early-January high of 57.2 cents. A close above this point would open the market to the 38 percent retracement objective of 63.5 cents. Good support from hedge funds could be the factor needed to push the market higher. There is some concern over the slow pace of plantings in the Midsouth and drought conditions in Texas. Also, demand is still slow as economic conditions remain a factor worldwide. Rice remains locked in a tight trading range. For the past four weeks September rice futures have been unable to trade higher than $12.54, but at the same time, are holding above $12.10. Since early January the market has traded a wider range, between $11.40 and $12.85 (with brief fluctuations). The market appears to have taken the adjustments in this month’s Supply/Demand Report in stride. Tight ending stocks and a small increase in ’09 plantings appear to be paving the way for a stronger market. Big government intervention stocks in Thailand —which could be released into the market at any time — could be a damper. Hog futures made a precipitous decline as swine flu stories prompted consumer fear. While there are no indications that swine flu can be contracted from pork, it has quickly cut into demand. Several countries have banned pork imports from the United States, and there is concern that retail demand will shift accordingly. A limit decline dropped trading out of a well-established trading range, and June is likely headed toward weekly chart support between $56–$51. Cattle also dropped. However, in the long run, it may experience a gain as some grillers swap beef for pork. Beef has made significant gains over the last several weeks and has likely topped. The swine flu incident may limit downside movement. The supply of market-ready cattle is tight, as evidenced by this month’s feed lot inventory, which was down 5 percent from a year ago. Strong packer margins should keep June futures in the $80–$85 trading range, where it has persevered for the past three months. 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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