Corn prices are mixed while soybeans, cotton and wheat prices are down for the week. The September U.S. Dollar Index before the close was 82.77 down 0.80 for the week. The Dow Jones Industrial Average before the close was 13,102, up 279 points since last Friday. Crude Oil before the close was 90.12 a barrel, down 1.71 a barrel for the week.
Corn:
Current Crop: September closed at $7.98 ½ a bushel, down 27 cents a bushel for the week. Technical indicators have a strong buy bias. Support is at $7.67 a bushel with resistance at $8.16 a bushel. Weekly exports were below expectations with net sales reductions of 5.5 million bushels (net sales reductions of 358,000 bushels for the 2011/12 marketing year and net sales reductions of 5.2 million bushels for the 2012/13 marketing year). Corn condition ratings this week were 26% rated good to excellent as compared to 31% last week and 62% a year ago. This was about expected. Poor to very poor were at 45% compared to 38% last week and 14% last year. Corn silking was reported this week at 86% compared to 71% last week, 56% last year and the five year average of 59%. Corn in the dough stage is estimated at 22% this week as compared to 12% last week and 7% last year and the five year average of 9%. Corn dented nationwide is 6% compared to 2% last year and the five year average of 2%. Weekly ethanol production fell again, the 6th straight week of declines. With export sales reductions and declines in ethanol production we are seeing signs of price rationing. However, yield estimates continue to drop as private estimates released this week ranged from 122 bushels per acre to 134 bushels per acre. At this point, with the uncertainty of yields and harvested acres it is impossible to predict whether prices have gone high enough to ration demand considering production prospects continue to drop. I am currently priced at 50% of anticipated production, and 30% with Put Options. A December $7.90 Put would cost 63 cents and set a $7.27 futures floor. This option expires November 23. A September $8.00 Put cost 41 cents and would set a $7.59 futures floor. It does expire August 24. I would want to cover the bushels through harvest and when they are sold. In some cases, the September Put may be suitable.
Deferred: March 2013 contract closed at $7.87 ½ a bushel, up 6 ¼ cents a bushel since last Friday. Technical indicators have a strong buy bias. Support is at $7.60 a bushel with resistance at $8.03 a bushel. September 2013 corn closed at $6.70 ¾ a bushel, up 7 ¾ cents for the week. I would have 10% of 2013 production priced.
Cotton:
Current crop: December closed at 71.45 cents per pound, down 1.49 cents since last week. Support is at 69.64 cents with resistance at 73.82 cents per pound. Technical indicators have changed to a sell bias. The Adjusted World Price for July 27– August 2 is 63.02 cents per pound, down 0.43 cents. All cotton weekly export net sales were 153,100 bales (9,700 bales of upland cotton net sales for 2011/12; net sales of 132,600 bales of upland cotton for 2012/13; net sales reductions of 800 bales of Pima cotton for 2011/12 and net sales of 11,600 bales of Pima for 2012/13. Cotton equities for 2012 loan cotton have been quoted in the 12 ½ – 13 cent range. Keep in contact with your cotton buyer for current quotes on loan equities and pricing alternatives. Cotton squaring nationwide is at 90% compared to 82% last week, 76% last year and the five year average of 82%. Cotton boll set is 47% nationwide compared to 36% last week, 41% last year and the five year average of 42%. Cotton crop condition ratings were 47% good to excellent compared to 45% last week and 29% last year. Poor to very poor were reported at 18% compared to 18% last week and 41% last year. Prices have moved sideways during the week, mainly influenced by the direction of the Dollar. Weather concerns in India are being watched closely as shortfalls in their production could increase demand for U.S. cotton. Indian mills have been reported as importing 1.5 million bales. India and China’s acres are both down from last year. As U.S. producers start looking at 2013 production, it is being assumed U.S. cotton acreage will decrease with the current relationship between grain prices and cotton prices. Lower global acreage could cause a rebound in cotton prices but it may not be soon enough for this year.
Deferred: March 2013 cotton closed at 72.15 cents per pound, down 1.32 cents for the week. Support is at 70.62 cents with resistance at 74.40 cents per pound. Technical indicators have a sell bias.
Soybeans:
Current crop: The November contract closed at $16.01 ¾ a bushel, down 84 ½ cents a bushel since last Friday. Technical indicators have changed to a buy bias. Support is at $15.26 a bushel with resistance at $16.49 a bushel. Weekly exports were above expectations at 26.1 million bushels (7.1 million bushels for the 2011/12 marketing year and sales of 19 million bushels for 2012/13). Soybeans blooming this week were reported at 79% compared to 66% last week, 54% last year and the five year average of 60%. Soybean setting pods were 36% this week as compared to 16% last week, 13% last year and the five year average of 19%. Soybean condition ratings were about expected at 31% good to excellent compared to 34% last week and 62% last year. Poor to very poor ratings were 35% compared to 30% last week, and 11% last year. Private yield estimates out this week were 35.7 and 38.5 bushels per acre. Prices have varied this week as the forecasts changed. August is generally the month that moisture or lack of it makes or breaks the soybean crop. The poor start in some areas moved that period into July. Prices should generally move on whether rain amounts are adequate to prevent further declines in yields. I am currently 50% priced overall on anticipated production; with an additional 30% priced in Put Options. From a price risk management standpoint, a $16.00 November Put option would cost $1.05 and set a $14.95 futures floor.
Deferred: January 2013 soybeans closed today at $15.91 ¼ a bushel, down 72 cents since last week. Technical indicators have changed to a buy bias. Support is at $15.14 a bushel with resistance at $16.38 a bushel. November 2013 soybeans closed at $12.64 ½, down 39 ½ cents for the week. Start watching for 2013 opportunities.
Wheat:
Nearby: September futures contract closed at $8.98 a bushel, down 45 ¼ cents a bushel since Friday. Technical indicators have a strong buy bias. Support is at $8.64 a bushel with resistance at $9.27 a bushel. Weekly exports were slightly under expectations at 13.5 million bushels for 2012/13. Winter wheat harvest has progressed to 82% harvested on July 22 compared to 80% last week, 71% a year ago and the five year average of 73%.
Deferred: March 2013 wheat closed at $9.13 a bushel, down 12 cents since last week. Technical indicators have a strong buy bias. Support is at $8.83 a bushel with resistance at $9.40 a bushel. Spring wheat is 98% headed compared 94% last week, 77% last year and the five year average of 90%. Spring wheat acreage harvested is being reported at 12%. Spring wheat condition ratings as of July 22 were 60% good to excellent compared to 65% last week and 74% last year. Poor to very poor were 11% compared to 8% last week and 5% a year ago. July 2013 wheat closed at $8.30 ¼ a bushel, up 10 ¾ cents for the week. I would be 10% priced for 2013 production.
