Soybean prices are up; corn and cotton prices are down with wheat prices mixed for the week. The U.S. Dollar Index traded at 80.16 before the close, up 0.47 for the week. The Dow Jones Industrial Average before the close was 13,114 down 229 points for the week. Crude Oil was trading at 86.26 a barrel, down 3.92 a barrel for the week. The 3rd quarter Gross Domestic Product (GDP) growth came in at 2% slightly stronger than the 1.8% traders expected and higher than the 2nd quarter number of 1.3%. The economy may have improved modestly, but continues to struggle. Eyes are on Hurricane Sandy as it approaches the East Coast and disruption it could have on financial markets next week. It is expected to have some but overall minimal damage on corn and soybeans in the eastern Corn Belt. The International Grains Council forecast this week that grain inventories for major exporters to be the tightest in 17 years. This along with South American weather concerns – either too wet or too dry – offers some support to the grain market. Planting in South America may be a little slow at this time, but it is early in their season.
Current Crop: December closed at $7.37 ¾ a bushel, down 23 ¾ cents a bushel for the week. Technical indicators have changed to a sell bias. Support is at $7.30 a bushel with resistance at $7.63 a bushel. Weekly exports were below expectations with net sales of 5.6 million bushels for the 2012/13 marketing year. Corn harvested nationwide on October 21 was 87% compared to 79% last week, 60% last year and the five year average of 49%. The latest ethanol production numbers of 801,000 barrels per day while up 4,000 barrels from the previous week are 12% below a year ago. USDA is currently projecting corn for ethanol at 10% less than last year. While supplies are currently projected tight, it looks like a drop off in usage from the effects of higher prices will cause stocks to get bigger in future USDA reports. I am forward priced priced at 50% of anticipated production, 30% with Put Options with the remainder sold at harvest. I would not store corn un-priced or at least without a floor price in place. A December $7.40 Put would cost 19 cents and set a $7.21 futures floor. This option expires November 23. If more time is needed a March $7.40 Put costs 40 cents and would set a $7.00 futures floor.
Deferred: March 2013 contract closed at $7.39 ¾ a bushel, down 19 ¾ cents a bushel since last Friday. Technical indicators have changed to a sell bias. Support is at $7.32 a bushel with resistance at $7.64 a bushel. September 2013 corn closed at $6.58 ½ a bushel, down 5 cents for the week. I would have 10% of 2013 production priced.
Current crop: March closed at 72.99 cents per pound, down 2.44 cents since last week. Support is at 72.11 cents with resistance at 73.69 cents per pound. Technical indicators have changed to a sell bias. The Adjusted World Price for October 26 – November 1 is 63.43 cents per pound, up 2.02 cents. All cotton weekly export net sales were 62,200 bales (34,500 bales of Upland cotton net sales for 2012/13; net sales of 13,200 bales of Upland cotton for 2013/14 and net sales of 14,500 bales of Pima cotton for 2012/13). Keep in contact with your cotton buyer for current quotes on loan equities and pricing alternatives. Cotton harvested was 38% compared to 28% last week, 44% last year and the five year average of 39%. I would be 25% – 50% priced on cotton. It is difficult to see much of an upside in the cotton market, more of a continued sideways motion. Look for any rallies as opportunities to add to pricing.
Deferred: July 2013 cotton closed at 75.16 cents per pound, down 2.26 cents for the week. Support is at 74.38 cents with resistance at 75.70 cents per pound. Technical indicators have changed to a sell bias. December 2013 cotton closed at 77.30 cents per pound, down 1.66 cents for the week.
Current crop: The November contract closed at $15.61 ¼ a bushel, up 27 cents a bushel since last Friday. Technical indicators have changed to a hold bias. Support is at $15.45 a bushel with resistance at $15.74 a bushel. Weekly exports were below expectations at net sales of 19.3 million bushels for 2012/13. Exports have been on fire as so far as 72% of USDA export projection has been sold with 86% of the marketing year left. It is expected that exports will slow dramatically next spring as South American soybeans are harvested. That is why their planting and production season is being scrutinized so closely. The only kink currently appearing in soybean demand could be the 3.8% drop in the poultry industry egg set as chickens account for over 50% of soybean meal demand. Soybeans harvested were reported at 80% compared to 71% last week, 77% last year and the five year average of 69%. I am currently 50% priced overall on anticipated production; with an additional 30% priced in Put Options. I would sell any un-priced soybeans at harvest. Storing soybeans should be examined for possible basis appreciation and not necessarily futures price speculation. From a price risk management standpoint, a January $15.60 strike price put option will cost 45 cents and set a $15.15 futures floor. It expires on December 21.
Deferred: March 2013 soybeans closed today at $15.37 a bushel, up 27 ¾ cents a bushel since last week. Technical indicators have changed to a buy bias. Support is at $15.19 a bushel with resistance at $15.47 a bushel. November 2013 soybeans closed at $13.39 ¾ up 2 cents for the week. Watch for 2013 opportunities.
Nearby: December futures contract closed at $8.63 ¾ a bushel, down 8 ¾ cents a bushel since Friday. Technical indicators have changed to a sell bias. Support is at $8.53 a bushel with resistance at $8.84 a bushel. Weekly exports were above expectations at 21 million bushels of net sales for 2012/13.
New Crop: July 2013 wheat closed at $8.64 ¾ a bushel, up 16 ½ cents since last week. Technical indicators have a buy bias. Support is at $8.56 a bushel with resistance at $8.73 a bushel. Winter wheat planted nationwide is reported at 81% compared to 71% last week, 79% last year and the five year average of 80%. Emergence is reported at 49% compared to 36% last week, 51% last year and the five year average of 56%. Drought in Australia and wheat growing areas of the U.S. are supportive of the market. I would be 10% priced for 2013 production.