Corn, cotton, soybean and wheat prices are all up for the week. The December U.S. Dollar Index was trading before the close at 75.22, down 1.40 since last Friday. The Dow Jones Industrial Average before the close was trading up 406 points for the week at 12,215. Crude Oil was trading before the close at 93.34 a barrel, up 5.75 a barrel since last Friday. Markets anxiously awaited news from the European Union Summit this week and at least initially were pleased with the outcome. European leaders agreed to an expansion of a rescue fund for indebted nations and reached an agreement with lenders on write down of Greek debt. Based on this news, the Euro strengthened, the U.S. Dollar weakened and commodity prices went up. Implementation of the agreement will be a strong factor in the strength or weakness of the Dollar and its impact on commodity prices. After a strong showing of commodity prices on Thursday, markets suffered from some profit taking on Friday as we headed into the weekend.
Corn:
Current Crop: December closed today at $6.55 a bushel, up 5 ¾ cents a bushel since last Friday. Support is at $6.40 with resistance at $6.64 a bushel. Technical indicators have a sell bias. Weekly exports were below expectations at 14.2 million bushels (13.2 million bushels for 2011/12 and net sales of 1 million bushels for 2012/13). Corn harvested as of October 23 was at 65% compared to 47% last week, 81% last year and the five year average of 51%. I am currently 50% forward priced for 2011 and 25% priced using a December $6.90 Put option that has been offset with a 42 cent profit. I would hold the remaining 25% of production in storage, but be ready to price on any rallies back up to the $6.80 – $7.00 range.
Deferred: March closed at $6.67 a bushel, up 7 cents a bushel since last Friday. Technical indicators have changed to a sell bias. Support is at $6.53 with resistance at $6.75 a bushel. September 2012 corn closed at $6.36 ½ a bushel. Watch closely over the next few months for opportunities to price the 2012 crop.
Cotton:
Current Crop: December closed at 104.37 cents per pound, up 7.18 cents since last week. Support is at 101.55 cents per pound, with resistance at 106.47 cents per pound. Technical indicators have changed to a hold bias. All cotton weekly export sales were better than expected at 386,000 bales (net sales of 385,100 bales of upland cotton for 2011/12 and sales of 900 bales of Pima cotton for 2011/12). China accounted for 397,100 bales overall, so without their sales there would have been a net reduction. China has been expected to build up their cotton reserves and prices below $1 a pound may have been the catalyst for their purchases.The Adjusted World Price for October 28 – November 3 is 87.40 cents/lb.; down 2.61 cents/lb. from last week. Quotes on 2011 loan equities are in the 46 – 47 cent range. Keep in contact with your cotton buyer for current quotes on loan equities and pricing alternatives. Cotton harvested is at 44% compared to 34% last week, 49% last year and the five year average of 36%. Pakistan cut its cotton forecast 6% from earlier projections due to floods which hit in August and September. Their latest projection is 450,000 bales less than USDA’s latest estimate. I am currently at 45% priced and would use today’s close to price another 15% to 60% overall. I would target any additional rallies to the 107 -110 cent range as a point to evaluate pricing although if cotton is put in the loan, it is more important to watch equity price movement
Deferred: March cotton closed at 102.50 cents per pound, up 6.90 cents for the week. Support is at 99.58 cents per pound, with resistance at 104.14 cents per pound. Technical indicators have changed to a buy bias. December 2012 prices closed at 97.84 cents/lb.
Soybeans:
Current Crop: The November contract closed at $12.17 a bushel, up 4 ¾ cents a bushel since last Friday. Support is at $11.98 with resistance at $12.51 a bushel. Technical indicators have changed to a sell bias. Weekly exports were below expectations at 9.4 million bushels (8.4 million bushels for the 2011/12 marketing year and 1 million bushels for the 2012/13 marketing year). Soybeans harvested were at 80% compared to 69% last week, 91% last year and the five year average of 71%. Even with a weaker dollar for the week, soybean prices had a hard time with sluggish fundamentals to no real fundamental news out this week. In weekly comments, I am currently 50% forward priced for 2011 and 25% priced using a November $14 Put option that has been offset or closed out with a $1.62 profit. Storage is still a harvest time decision and I think an alternative if soybean prices stay under $12.80 -$13.00 bushel. If storage is available, I would look to store the remainder with a price target in the $13.00 – $13.40 range. Consider locking in a portion of the basis on stored soybeans.
Deferred: May soybeans closed today at $12.44 ¾ a bushel, up 9 ¼ cents since last week. Support is at $12.26 with resistance at $12.77 a bushel. Technical indicators have changed to a sell bias. November 2012 soybeans closed at $12.36 ½ this week.
Wheat:
Nearby: December futures contract closed at $6.44 ½ a bushel, up 12 ½ cents a bushel since Friday. Support is at $6.28 with resistance at $6.61 a bushel. Technical indicators have a sell bias. Weekly exports were at the low end of expectations at 11.6 million bushels for 2011/12. The International Grains Council released its latest estimate on 2010/11 global wheat production and is 110 million bushels higher than the latest USDA estimate.
New Crop: July 2012 wheat closed at $7.19 a bushel, up 21 ½ cents since last week. Support is at $7.04 with resistance at $7.32 a bushel. Technical indicators have changed to a sell bias. Nationwide, winter wheat planted is 82% compared to 73% last week, 87% last year and the five year average of 84%. As of October 23, winter wheat emergence is at 56% compared to 44% last week, 63% last year and the five year average of 63%. Some rain was seen across the Plains this week, but overall there is concern on what the wheat condition will be as it goes into dormancy. This should provide some production uncertainty and price support to the wheat market.
