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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 11-20-2009 -------------------------------------------------------------------------- http://www.arfb.com Soybean futures reached a three-month high. January closed above a shallow trend-line at $10.28, leaving the August high of $10.68 as the next potential upside objective. Harvest, while well behind normal, is almost complete. With that, interest is turning to quality concerns and dry conditions in Argentina. Outside markets continue to provide direction. A weak dollar has kept both export interest and domestic crush at high levels. The drought situation in Argentina has temporarily derailed concerns about a huge South American crop. Corn has exceeded $4 and could test the October high of $4.13. Benefiting from recent good weather, harvest is more than 54-percent complete. However, that's well below the 90-percent norm.Research shows the biggest weather losses occur when harvest is delayed past mid-November. At that point in the year, mycotoxins are widespread. This could cause problems, particularly with DDGS (distiller's dried grains with solubles), as most ethanol plants are not equipped to blend good and contaminated corn. Wheat is defying fundamentals. Both old and new crop futures are testing previous resistance, with December around $5.75 and new crop July near $6.20. An abundant supply in the United States and around the world suggests wheat is overpriced. However, the weaker dollar has brought outside investment interests into the market. To those interests, wheat appears under-priced relative to corn and soybeans, despite the fact harvest delays have likely reduced 2010 soft red plantings. July is at a key level. A close above $6.20 could bring $6.50 back into the picture. Cotton is still trading in the 66-69 cents trading range. Brief forays outside that range were just that – brief. In their last report, USDA reduced this year’s production number by 500,000 bales. Many feel that was too little, and that mid-South crop losses will be even larger. In addition, quality will be a problem for much of the crop. The smaller production estimate pared an equal amount off the ending stocks, which now stand at a projected level of 4.9 million bales. A weaker and increasing export demand could push stocks lower. Long-term – if corn and soybeans remain at current levels – cotton will have to go higher to attract acreage. Rice futures are treading water just above $15. A smaller U.S. long grain crop could be a factor as we move through the marketing year. On the international level, the market is firming as India has set the stage to become an importer. They could need as much as 3 million metric tons of rice. Vietnam has been the major exporter, but as of now, it's still awaiting its big harvest. Thailand is still holding substantial old crop intervention stocks with new crop on the way. Their market is firming, supported by the new intervention program and ideas that world demand will increase. All this could be enough to push futures toward long-term chart retracement objectives of $16.35, $17.94 and $19.53. However, initial resistance is the ’08 fall highs around $15.80. The other objectives may be a stretch. In dairy, block cheese was the only spot market to show price movement with an increase of 75 cents and a new high for the year of $1.58. Barrels, butter and nonfat dry milk prices remain unchanged. In trading activity, three loads of butter moved; that's it. Milk futures saw gains for two consecutive days, taking back some of the losses posted early last week. Futures contracts in 2010 increased an average of 6 cents, with March showing the largest gain at 12 cents. Fluid milk sales in the third quarter were 13.59 billion pounds, up .9 percent from a year ago. In the first nine months of the year, packaged milk sales are up 1.3 percent. According to USDA, milk supplies vary throughout the country. Intake is higher in the Midwest, with bottlers able to acquire the milk they need. Northeast and Western regions report tightness, with milk being divided up, causing some plants to run on reduced schedules. December live cattle posted a potential double bottom last week, meaning support begins at $82.80. However, improvement in the value of the dollar and disappointing unemployment reports are limiting upside. Failure to hold above the contract low will open the door for more downward movement. Hogs have seen unexpected strength this week because of improving product values and indications that exports are improving. Investment fund buying has also provided support. Cash prices look “toppy,” and futures are overbought, so expect the upside to be limited for now. There could be additional growth after Thanksgiving, when retailers start restocking their shelves. Resistance for February begins at the recent high of $64.80. 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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