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| ARKANSAS FARM BUREAU ELECTRONIC NEWSLETTER Bi-Weekly Market Briefings for 01-22-10 ----------------------------------------------------------------------- http://www.arfb.com USDA reduced cotton production by 200,000 bales, leaving projected ending stocks at just 4.2 million bales. However, expectations for increased global demand were tempered as China and India’s usage went unchanged. Heading into 2010, the market is anticipating increased plantings. Because of this, December futures have worked lower since peaking at 78.25 cents in late November. Support at 73 cents is being tested. A close below that level could bring objectives at 71.4 cents and 69.8 cents into play. However, outside markets will be a major factor, and the market is likely to trade between 73-78 cents as we move forward. Rice continued to drop despite minor USDA adjustments. Major adjustments were seen in mid-December, when expectations that India would import rice were put to bed. The overall weakness in the grain and soybean complex added to the rice-selling fervor. Old-crop March appears to be headed toward the $13.60-$13 range that contained the market for almost three months beginning in August. Upside potential in both new and old crop will be limited without increased export activity. Corn plummeted following January's Supply/Demand report. USDA threw investors a curve by increasing planted acreage and yield for corn. With the market expecting a 100-million bushel cut, the 230-million bushel increase sent the market down the limit. Prices continued to drop going into the recent three-day holiday. Technically, the sharp decline on the day of the report and the declines that followed left futures in a very negative position. There's a chance that the March contract could breach a 50-percent retracement objective at $3.70, giving way to support in the $3.60-$3.55 area. Any rebound will find strong resistance at $4. For new-crop September, support at $3.95 is holding (a trend-line cuts across that area, which is also the 50-percent retracement objective). The next support is around $3.80. A rebound above $4.10 will be difficult. Soybeans declined on news of a record yield. Like with corn, USDA raised the soybean yield to 44 bushels per acre, adding 42 million bushels to this year’s production estimate. At the same time, usage was increased by 50 million bushels, and ending stocks were decreased by 10-240 million bushels. The market made big adjustments in soybean prices going into the report, so declines were less severe than with corn. March futures broke an uptrend in the process and are showing some stability just under $9.70. Support at $9.55 could be tested. New-crop November broke support at $9.50, allowing a potential downside move to the $8.80 area. Old benchmarks at $9.50 and $10 would be possible upside targets on any rebound. Weak demand pressured wheat despite having the lowest planted acreage in 97 years. Compared to last year, winter wheat plantings were down 14 percent, and soft red wheat plantings were down almost 30 percent. USDA raised projected stocks by 76 million bushels amid poor exports. Global supplies are near 200 million metric tons, the largest they've been in eight years. A July close below $5.25 will bring the contract low of $4.83 ¾ back into play. It's a long shot, but ability to hold this level could bring a partial retracement of losses with the recent high of $5.92. Cattle futures have posted significant gains over the past few days. Cutout values are at their highest levels since last spring, and packer margins are stronger as a result. Cash prices – while somewhat limited last week as a result of warmer weather and an increase in cattle coming to market – seem to be holding firm between $85-$86. The recent strength of hog futures has also carried over to the cattle pits. Nearby, February has resistance just above $88. After months of holding in a mostly sideways pattern, hog futures have charted an impressive rally. Thanks to renewed export demand, wholesale pork values are at their highest level in 15 months, and packers have reacted in kind. However, the market is technically oversold and is trading at approximately $3.50 premium to cash prices. Because of that, a short-term correction could come at any time. 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  |
