Corn, cotton, soybeans, and wheat prices are all down for the week. The December U.S. Dollar Index closed Friday at 79.83, up 1.60 for the week. The Dow Jones Industrial Average closed down 564 points for the week at 11,232. Crude Oil closed the week at 96.77 a barrel, down 1.05 a barrel. A shortened trading week brought no real surprises as the commodity market seemed to be dominated by concerns on Europe’s financial debt and a strengthening dollar. This overshadowed positive export sales for cotton, soybeans, and wheat. The market seems to be absence of noncommercial buyers (speculators, funds, etc.) and could still be feeling the effects of the MF Global meltdown. It may take a while for confidence to be brought back to the market place. Prices could eventually turn upward but it will most likely take confidence in the trading system, a turnaround in Europe’s finances, and a weakening dollar for positive price action. Somewhere in there, fundamental supply and demand may also matter.
Corn:
Current Crop: December closed Friday at $5.82 ½ a bushel, down 27 ¾ cents a bushel for the week. Support is at $5.73 with resistance at $5.98 a bushel. Technical indicators have a strong sell bias. Weekly exports were below expectations at 13.8 million bushels (12.3 million bushels for the 2011/12 marketing year and 1.5 million bushels for 2012/13 marketing year). In the last NASS report for corn harvest, the corn crop as of November 20 was 96% harvested compared to 93% last week, 99% last year and the five year average of 88%. 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 substantial rallies. Corn prices are at a point or at least close to the point where in the past we have seen end users step in and buy and eventually push the market up.
Deferred: March closed at $5.90 a bushel, down 28 cents a bushel since last Friday. Technical indicators have a strong sell bias. Support is at $5.80 with resistance at $6.05 a bushel. September 2012 corn closed at $5.57 ½ a bushel. Watch closely over the next few months for opportunities to price the 2012 crop.
Cotton:
Nearby: March closed at 90.87 cents per pound, down 2.40 cents since last week. Support is at 89.04 cents per pound with resistance at 92.80 cents per pound. Technical indicators have a strong sell bias. All cotton weekly export sales were above expectations at 815,300 bales (net sales of 776,600 bales of upland cotton for 2011/12; sales of 14,100 bales of upland cotton for 2012/13; reductions of 1,800 bales of Pima cotton for 2011/12 and sales of 26,400 bales of Pima cotton for 2012/13). This is the third straight week for better than expected exports with the majority going to China. As in the previous week, many analysts look at this as China rebuilding stocks and are more concerned by the lack of other buyers. To be a real market maker, it looks like the market is going to have to see continued sales before it is convinced that this is more than just business as usual. The Adjusted World Price for November 25 – December 1 is 80.70 cents/lb.; down 5.93 cents/lb. from last week. Cotton equities have been quoted in the low 30s. Keep in contact with your cotton buyer for current quotes on loan equities and pricing alternatives. Cotton harvested is at 84% compared to 79% last week, 84% last year and the five year average of 74%. I am currently at 60% priced and would target any substantial rallies as a point to evaluate pricing although if cotton is put in the loan, it is more important to watch equity price movement. If equities get to a level that you are comfortable with on your overall pricing (loan, equity, seed, and hauling), have your recap sheets ready for your cotton buyer and price them out.
New Crop: December 2012 cotton closed at 87.92 cents per pound, down 3.08 cents for the week. Support is at 86.84 cents per pound with resistance at 89.94 cents per pound. Technical indicators have a strong sell bias.
Soybeans:
Nearby: The January contract closed at $11.06 ½ a bushel, down 61 ¾ cents a bushel since last Friday. Support is at $10.88 with resistance at $11.34 a bushel. Technical indicators have a strong sell bias. Weekly exports were above expectations at 33.9 million bushels for the 2011/12. Soybeans harvested has essentially wrapped up. 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. I would look to store the remainder and as with corn and cotton be ready to price out on any substantial rallies.
Deferred: May soybeans closed today at $11.24 ½ a bushel, down 63 ½ cents since last week. Support is at $11.08 with resistance at $11.51 a bushel. Technical indicators have a strong sell bias. November 2012 soybeans closed at $11.19 ½ a bushel this week.
Wheat:
Nearby: December futures contract closed at $5.74 ½ a bushel, down 23 ¾ cents a bushel since Friday. Support is at $5.63 with resistance at $5.91 a bushel. Technical indicators have a strong sell bias. Weekly exports were above expectations at 22.6 million bushels for 2011/12.
New Crop: July 2012 wheat closed at $6.17 ¾ a bushel, down 28 ¼ cents since last week. Support is at $6.09 with resistance at $6.32 a bushel. Technical indicators have a strong sell bias. As of November 20, winter wheat emergence is at 87% compared to 83% last week, 91% last year and the five year average of 88%. Winter wheat condition ratings were 50% good to excellent compared to 50% last week and 47% a year ago. The poor to very poor ratings were 16% compared to 14% last week and 16% a year ago.
