Corn, cotton, soybeans, and wheat prices are all up for the week. The December U.S. Dollar Index before the close on Friday was at 78.79, down 1.04 for the week. The Dow Jones Industrial Average before the close was up 823 points for the week at 12,055. Crude Oil was trading before the close at 100.33 a barrel, up 3.56 a barrel. Outside influences may have affected more the Dow this week than commodity prices, but at least prices are up for the week. A surprise coordinated move by six major central banks around the world to provide liquidity at very low interest rates was put in place to avoid a meltdown in the euro. This did cause weakness in the dollar which generally is positive for commodity prices. Also in the world news this week was China’s lowering of bank reserve requirements which was seen as a sign for jumpstarting growth in their economy (again generally positive for commodity prices). To cap the week off, employment data out today saw 120,000 jobs created in November (about expected) with the unemployment rate dropped 0.4% to 8.6%, the lowest in 2 ½ years. However, the jobs report could be misleading as the majority of jobs added were in retail, temporary help, and leisure and hospitality. Manufacturing rose by just 2,000 jobs and construction lost 12,000 jobs. Certainly not a clear sign employment has turned the corner. USDA will release its December Supply & Demand report on Friday, December 9. There are not expected to be any changes to production as that will be updated in January. Look for trade guesses on the report to come out early to the middle part of next week.
Corn:
Nearby: March closed Friday at $5.95 ¼ a bushel, up 5 ¼ cents a bushel for the week. Support is at $5.86 with resistance at $6.10 a bushel. Technical indicators have a strong sell bias. Weekly exports were below expectations at 13.9 million bushels (11.1 million bushels for the 2011/12 marketing year and 2.8 million bushels for 2012/13 marketing year). China’s National Bureau of Statistics released data that China produced a record grain crop in 2011 with corn leading the way, up 8.2% from 2010. If accurate, this could see less U.S. exports to China. 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.
New Crop: September closed at $5.71 ¾ a bushel, up 14 ¼ cents a bushel since last Friday. Technical indicators have a strong sell bias. Support is at $5.66 with resistance at $5.82 a bushel. Watch closely over the next few months for opportunities to price the 2012 crop.
Cotton:
Nearby: March closed at 91.84 cents per pound, up 1.03 cents since last week. Support is at 90.33 cents per pound with resistance at 93.03 cents per pound. Technical indicators have a strong sell bias. All cotton weekly export sales were 103,100 bales (net sales of 85,000 bales of upland cotton for 2011/12; sales of 19,000 bales of upland cotton for 2012/13; and reductions of 900 bales of Pima cotton for 2011/12). The Adjusted World Price for December 2 – December 8 is 78.49 cents/lb.; down 2.21 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 92% compared to 84% last week, 90% last year and the five year average of 82%. 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 88.93 cents per pound, up 1.01 cents for the week. Support is at 88.24 cents per pound with resistance at 89.28 cents per pound. Technical indicators have a strong sell bias.
Soybeans:
Nearby: The January contract closed at $11.35 ¾ a bushel, up 29 ¼ cents a bushel since last Friday. Support is at $11.20 with resistance at $11.52 a bushel. Technical indicators have a strong sell bias. Weekly exports were below expectations at 18 million bushels for the 2011/12 marketing year. China’s lowering of bank reserve requirements could eventually lead to increased commodity demand, particularly soybeans. 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.
New Crop: November soybeans closed today at $11.55 ½ a bushel, up 36 cents since last week. Support is at $11.44 with resistance at $11.71 a bushel. Technical indicators have a strong sell bias.
Wheat:
Nearby: March futures contract closed at $6.25 ½ a bushel, up 36 ½ cents a bushel since Friday. Support is at $6.02 with resistance at $6.43 a bushel. Technical indicators have changed to a sell bias. Weekly exports were within expectations at 18.5 million bushels for 2011/12. Ukraine has reduced its grain export forecast for 2011-12, most likely from weather concerns and could possibly become an importing nation next year. This would be positive for U.S. wheat.
New Crop: July 2012 wheat closed at $6.54 a bushel, up 36 ¼ cents since last week. Support is at $6.33 with resistance at $6.72 a bushel. Technical indicators have changed to a sell bias. As of November 27, winter wheat emergence is at 92% compared to 87% last week, 93% last year and the five year average of 92%. Winter wheat condition ratings were 52% good to excellent compared to 50% last week and 47% a year ago. The poor to very poor ratings were 13% compared to 16% last week and 17% a year ago. This is the last week for NASS to report condition ratings. They will be picked back up in April, 2012.
