Happy New Year and Best Wishes for a safe and profitable 2012! Cotton prices are up while corn, soybeans, and wheat prices are down for the week. The March U.S. Dollar Index before the close on Friday was at 81.58, up 1.05 for the week. The Dow Jones Industrial Average before the close was up 168 points for the week at 12,386. Crude Oil was trading before the close at 101.54 a barrel, up 2.71 a barrel. The unemployment rate was reported today at 8.5%, the lowest in nearly 3 years. Weather concerns in South America still dominated market action this week. Production estimates have been reduced from the previous high levels. Rainfall in the drier areas of Argentina and southern Brazil are forecast for next week but they are currently experiencing high temperatures. Damage to their crop is most likely factored into the market. They will have to have continued weather concerns and projected reductions in their production for additional market strength from just their weather. USDA is expected to reduce South American production in the January 12th supply and demand report. Also updated January 12th will be the Quarterly Grain Stocks which will reflect stocks as of December 1, 2011. Exports reported today were disappointing but it was not totally unexpected due to the holidays.
Nearby: March closed at $6.43 ½ a bushel, down 3 cents a bushel for the week. Support is at $6.35 with resistance at $6.53 a bushel. Technical indicators have changed to a buy bias. Weekly exports were below expectations at 12 million bushels (11.8 million bushels for the 2011/12 marketing year and 0.2 million bushels for 2012/13 marketing year). For corn in storage, I would look to reward this recent rally with sales. If it fits cash flow needs, I would be willing to store a portion of the crop a little longer, but there is a higher chance of a down move rather than an up move. If current prices are acceptable, sell corn out of storage and don’t look back.
New Crop: September closed at $6.02 ¼ a bushel, down 11 cents a bushel since last Friday. Technical indicators have changed to a sell bias. Support is at $5.98 with resistance at $6.11 a bushel. Producers looking to forward price a portion of their crop may want to put some price targets in with their grain elevator. I would target $6.30 futures as a place to start.
Nearby: March closed at 95.86 cents per pound, up 4.06 cents since last week. Support is at 93.87 cents per pound with resistance at 96.91 cents per pound. Technical indicators have changed to a buy bias. All cotton weekly export sales were 8,600 bales (reductions of 9,500 bales of upland cotton for 2011/12; sales of 3,100 bales of upland cotton for 2012/13; and sales of 6,200 bales of Pima cotton for 2011/12 and sales of 8,800 bales of Pima cotton for 2012/13). Keep in contact with your cotton buyer for current quotes on loan equities and pricing alternatives. With the recent rally in cotton prices, I would move to 80% of the crop sold and hold the remainder.
New Crop: December cotton closed at 91.66 cents per pound, up 3.82 cents for the week. Support is at 89.44 cents per pound with resistance at 92.78 cents per pound. Technical indicators have changed to a buy bias.
Nearby: The March contract closed at $11.96 ½ a bushel, down 11 ¼ cents a bushel since last Friday. Support is at $11.77 with resistance at $12.29 a bushel. Technical indicators have changed to a hold bias. Weekly exports were below expectations at 10.3 million bushels for the 2011/12 marketing year. I would use this recent rally as an opportunity to sell at least a half of stored soybeans. It will take additional weather problems in South America for the soybean market to gain additional strength.
New Crop: November soybeans closed today at $11.91 ¼ a bushel, down 13 ¼ cents since last week. Support is at $11.73 with resistance at $12.22 a bushel. Technical indicators have changed to a hold bias.
Nearby: March futures contract closed at $6.24 ¾ a bushel, down 28 cents a bushel since Friday. Support is at $6.16 with resistance at $6.40 a bushel. Technical indicators have a sell bias. Weekly exports were below expectations at 6.2 million bushels for 2011/12.
New Crop: July wheat closed at $6.60 ¼ a bushel, down 26 cents since last week. Support is at $6.51 with resistance at $6.76 a bushel. Technical indicators have a sell bias.