Corn, cotton, soybeans, and wheat prices are up for the week. The U.S. Dollar Index before the close was at 80.16, down 0.08 for the week. The Dow Jones Industrial Average traded before the close at 13,005 down 5 points for the week. Crude Oil traded before the close at 88.89 a barrel, up 0.61 a barrel for the week. Weather continues to be a focal point for the markets both in the U.S. and South America. The period to watch in South America will be mid-December to mid-February as conditions during that timeframe will have the greatest impact on their production. The Plains and western Corn Belt states look to go into winter under drought conditions and low subsoil moisture. If these conditions persist, emphasis will shift to having to have very timely rains to produce a crop. Markets should be volatile through the winter until we see what kind of crop South America has and then shift to growing conditions in the U.S. Without weather problems, we could see price strength in early winter quickly go away and prices trend lower.
Corn:
Nearby: March closed at $7.52 ¾ a bushel, up 3 cents a bushel for the week. Technical indicators have changed to a buy bias. Support is at $7.50 a bushel with resistance at $7.77 a bushel. Weekly exports were below expectations with net sales of 10.4 million bushels (9.3 million bushels of net sales for the 2012/13 marketing year and 1.1 million bushels of net sales for the 2013/14 marketing year). Ethanol production last week was 803,000 barrels per day, down 8,000 barrels from the previous week and 14% below a year ago. At this pace downward adjustments in corn for ethanol demand will be needed. We will have to see if it picks up any. Support for corn prices include tight U.S. stocks and concern on the South American corn crop. Excessive rainfall has hampered Argentine production where planting is running 12% behind a year ago while dry weather in southern Brazil could be cutting yield potential. I would be priced out of 2012 corn at this time. However, for producers with corn in storage I would not store un-priced or without a floor price in place. A March $7.50 Put costs 28 cents and would set a $7.22 futures floor.
New crop: September contract closed at $6.56 ¾ a bushel, up 10 ¾ cents a bushel for the week. Technical indicators have changed to a buy bias. Support is at $6.53 a bushel with resistance at $6.66 a bushel. I would have 10% of 2013 production priced.
Cotton:
Nearby: March closed at 73.91 cents per pound, up 2.48 cents since last week. Support is at 72.99 cents with resistance at 74.41 cents per pound. Technical indicators have changed to a buy bias. The Adjusted World Price for November 30 – December 6 is 60.94 cents per pound, down 0.09 cents. Keep in contact with your cotton buyer for current quotes on loan equities and pricing alternatives. All cotton weekly export net sales were solid at 325,200 bales (300,300 bales of Upland cotton net sales for 2012/13; net sales of 14,300 bales of Upland cotton for 2013/14 and net sales of 10,600 bales of Pima cotton for 2012/13. Cotton harvested was 89% compared to 84% last week, 90% last year and the five year average of 85%. I would be 25% – 50% priced on cotton. Look for rallies as opportunities to add to pricing.
New crop: December 2013 cotton closed at 77.07 cents per pound, up 1.62 cents for the week. Support is at 76.58 cents with resistance at 77.58 cents per pound. Technical indicators have a hold bias.
Soybeans:
Nearby: The January contract closed at $14.38 ¾ a bushel, up 20 cents a bushel since last Friday. Technical indicators have a sell bias. Support is at $14.17 a bushel with resistance at $14.63 a bushel. Weekly exports were below expectations at net sales of 11.7 million bushels for 2012/13. Like corn, Argentine soybean planting is behind by about 14% on the average. This is also offering support to soybean prices. I am currently priced out of 2012 production. There does not appear to be any advantage to storing other than price speculation. That may be better served by selling soybeans and buying an out of the money March or May call option. A $14.60 March Call would cost 44 cents. I would not store un-priced without setting a floor price. A March $14.40 Put would cost 66 cents and set a $13.74 futures floor. This option expires February 22, 2013.
New crop: November 2013 soybeans closed today at $13.04 ½ a bushel, up 19 ¾ cents a bushel since last week. Technical indicators have changed to a sell bias. Support is at $12.88 a bushel with resistance at $13.18 a bushel. Watch for 2013 opportunities. I would be 5% priced on 2013 production.
Wheat:
Nearby: March futures contract closed at $8.63 ½ a bushel, up 2 cents for the week. Prices were down 22 cents today. Technical indicators have a strong sell bias. Support is at $8.46 a bushel with resistance at $8.95 a bushel. Weekly exports were below expectations at net sales of 10.3 million bushels for 2012/13.
New Crop: July 2013 wheat closed at $8.70 ½ a bushel, up 16 ¼ cents since last week. Prices were down 16 cents today. Technical indicators have changed to a strong buy bias. Support is at $8.57 a bushel with resistance at $8.93 a bushel. Winter wheat emergence is reported at 88% compared to 84% last week, 91% last year and the five year average of 90%. Wheat crop condition ratings were reported with good to excellent at 33% compared to 34% last week, and 52% last year. Poor to very poor were 26% compared to 24% last week, and 13% last year. This will be the last wheat crop condition ratings until the spring and these are the worse ratings for the crop going into the winter. Naturally, there is quite a bit of concern in the Plains states on the condition of the wheat crop primarily from drought conditions. It is generally considered to be a more critical time when wheat breaks dormancy in the spring and that influences yields more than conditions now. Nevertheless, these poor ratings have offered support for prices. I am currently priced 10% on the 2013 crop and would put serious consideration to pricing more as the wheat crop develops.
