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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 09-25-2009 -------------------------------------------------------------------------- http://www.arfb.com Soybeans rallied sharply last week because of a long-range weather forecast indicating frost potential. A day later, however, the frost forecast was gone, and the market started to retrace gains. Now, it appears the crop will make it to maturity as weather forecasts indicate mild temperatures over the next two weeks. Drying conditions won’t be good and harvest will be a drawn-out affair. That leaves the crop open to other weather impact and could provide enough concern to keep the market from tanking. However, November’s recent plunge through old support at $9.40 suggests additional technical pressure. Prior support has halted previous declines at $8.80, $8.60 and $7.84. Outside markets — crude oil, the dollar and equities — will influence price direction. Corn’s production potential is growing. Fear of frost is almost non-existent, and yield prospects are increasing with each passing day. Usage is projected to be almost 13 million bushels, but each bushel’s increase in yield will add another 80 million bushels to the total. Suffice to say, this will be a record crop, and upside price potential will be limited. December is holding above $3, but harvest pressure will increase, and a close below $2.90 is a distinct possibility. An anticipated decline in wheat acreage may not be enough to halt the long-term downward trend in the market. The sideways trading pattern we’ve seen over the past two weeks may simply be a pause in the overall drop. A wide Gulf Basis tells us wheat is still a tough sell in the export market. Big supplies worldwide are tempering U.S. movement, which is just more than half of what it was a year ago. Seasonally, wheat prices tend to improve, but a December close below $4.50 would signal further weakness. A close above $5.16 is needed to confirm a market low. This month’s Supply/Demand Report included several rice adjustments, including a 7.3 million cwt increase in 2008-09 stocks, and a 6.7 million cwt increase in projected 2009 production. Futures fell sharply in response, but recent weather conditions may temper future production estimates. In addition to the delay in harvest, there are concerns about disease and potential quality loss. November futures are consolidating above the recent low of $13.08. That represents a 50-percent retracement of the summer rally and suggests the market could work toward the recent high near $14.30. Cotton has made another concerted run toward the recent high of 65.5 cents. Weather could cut into this year’s projected crop of 13.44 million bales. A late crop has been further hindered by a wet, cool July and less than perfect September weather. A smaller crop and improving worldwide economic conditions would set the stage for price improvement down the line. Cattle futures have reached their lowest level in many months as the weak hog market is taking its toll. The monthly Cattle-on-Feed Report added to this week’s negative undertone. The total inventory was larger than expected due to an increase in August placements of 2 percent over last year. Rather than reacting to lower corn prices, feeders have been following live futures lower. October live futures have support beginning at $84.70. Hog futures have been trending upward in recent weeks; however, October has now broken out of that trend, and the short-term outlook is bearish. Daily slaughter is near capacity, and marketings always rise seasonally in the fall. Prices have been low enough to stimulate better domestic demand. That increase is providing some support. 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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