|
Price |
Change |
|
| U.S. Dollar |
81.56 |
+0.98 |
| Crude Oil |
93.24 |
-3.17 |
| Dow |
14,000 |
+18 |
Soybeans prices are up; cotton prices mixed while corn and wheat prices are down for the week. USDA held their annual Ag Outlook Forum on February 21 & 22 and offered an overall bearish outlook for 2013 crops, especially corn and soybeans. We should keep in mind that these numbers are more statistically driven and are more or less best guesses for this point in time. Still, the acreages being worked with are in the ranges that have been bantered around as of late. Projected yields may find more arguments, as for grains it appears that everything will have to go just right to be achieved. The weather system that moved through the Plains and Midwest although not a drought buster did add needed moisture to the area and put pressure on new crop prices. Ships are stacking up in South American harbors and causing delays in getting their crop to the world market. U.S. grain exports will benefit for a while until the delays get worked out.
Corn:
Nearby:
| Corn |
Price |
Change |
| May |
$6.84 ¼ |
-$0.12 ¾ |
| Support |
$6.79 |
-$0.04 |
| Resistance |
$6.94 |
-$0.08 |
| Technical |
Strong Sell |
= |
| 20 Day MA |
$7.13 |
-$0.07 |
| 50 Day MA |
$7.12 |
-$0.04 |
| 100 Day MA |
$7.28 |
-$0.02 |
Weekly exports were above expectations with net sales of 15 million bushels (14.2 million bushels for the 2012/13 marketing year and .8 million bushels of net sales for the 2013/14 year). Ethanol production rose 8,000 barrels per day to 797,000 barrels per day in the latest report. On the daily reporting system, a new crop buy of 9.5 million bushels by China was reported.
New crop:
| Corn |
Price |
Change |
| September |
$5.73 |
-$0.09 ¼ |
| Support |
$5.68 |
-$0.02 |
| Resistance |
$5.81 |
-$0.11 |
| Technical |
Strong Sell |
= |
| 20 Day MA |
$5.95 |
-$0.07 |
| 50 Day MA |
$6.10 |
-$0.07 |
| 100 Day MA |
$6.33 |
-$0.03 |
The USDA Ag Forum numbers for 2013/14 were released and to no real surprise were bearish. The current working numbers are 96.5 million acres of corn planted, 88.8 million acres harvested, and a corn yield of 163.6 bu. acre producing a crop of 14.530 billion bushels. Total usage was projected up 15.8% at 13.01 billion bushels leaving carryover at a whopping 2.177 billion bushels and an average price of $4.80 per bushel. Certainty, holes can be shot into the assumptions both on the production and demand side, but either way you look at it with normal weather stocks will grow and prices will be lower. Currently, I would have 10% of 2013 production priced. I am still looking for a bounce for additional pricing or for an opportunity to implement an option strategy.
Cotton:
Nearby:
| Cotton |
Price(cents) |
Change |
| May |
83.14 |
-0.05 |
| Support |
81.95 |
+1.15 |
| Resistance |
84.75 |
+0.91 |
| Technical |
Strong Buy |
= |
| 20 Day MA |
82.86 |
+0.65 |
| 50 Day MA |
79.32 |
+0.74 |
| 100 Day MA |
76.48 |
+0.41 |
| AWP |
69.43 |
+0.62 |
All cotton weekly export net sales were better than expected at 239,500 bales (171,600 bales of Upland cotton net sales for 2012/13; net sales of 38,200 bales of Upland cotton for 2013/14; net sales of 14,800 bales of Pima cotton for 2012/13 and net sales of 14,900 bales of Pima cotton for 2013/14). I would be 75% priced on 2012 cotton. I would target 85 – 87 cents to price remaining cotton.
New crop:
| Cotton |
Price(cents) |
Change |
| December |
83.64 |
+0.39 |
| Support |
82.83 |
+0.67 |
| Resistance |
84.47 |
+0.79 |
| Technical |
Strong Buy |
= |
| 20 Day MA |
82.35 |
+0.84 |
| 50 Day MA |
80.25 |
+0.51 |
| 100 Day MA |
78.45 |
+0.30 |
The cotton numbers released at the USDA Ag Outlook Forum were friendly for U.S cotton but negative on the world picture. Cotton plantings were projected at 10 million acres with production estimated at 14 million bales and usage at 14.8 million bales leaving ending stocks at 3.7 million bales and a stocks to use ratio of 25.3%. This compares to the current stocks of 4.5 million bales and a stocks to use ratio of 28.3%. World stocks are forecast to increase to 88.4 million bales. Cotton equities on 2013 loan cotton look to end the week in the 25 cent range.
Soybeans:
Nearby:
| Soybeans |
Price |
Change |
| May |
$14.43 ¾ |
+$0.29 |
| Support |
$14.06 |
+$0.22 |
| Resistance |
$15.15 |
+$0.84 |
| Technical |
Buy |
++ |
| 20 Day MA |
$14.48 |
+$0.07 |
| 50 Day MA |
$14.26 |
= |
| 100 Day MA |
$14.33 |
-$0.02 |
Weekly exports were below expectations with net reductions of 2.1 million bushels (net reductions of 4.4 million bushels for 2012/13 and net sales of 2.3 million bushels for 2013/14). Shipping delays in Brazil switched business back to the U.S. as China needs soybeans now.
New crop:
| Soybeans |
Price |
Change |
| November |
$12.65 |
+$0.03 ¼ |
| Support |
$12.35 |
+$0.11 |
| Resistance |
$13.21 |
-$0.35 |
| Technical |
Sell |
+ |
| 20 Day MA |
$13.00 |
-$0.06 |
| 50 Day MA |
$12.99 |
-$0.04 |
| 100 Day MA |
$13.10 |
-$0.02 |
The numbers from this week’s Ag Outlook Forum placed soybean planting at 77.5 million acres, harvested acres of 76.6 million acres, yield of 44.5 bu. per acre and a crop of 3.405 billion bushels. Demand is expected to increase 7% to 3.295 billion bushels creating ending stocks of 250 million bushels or double the February estimate. The average price is expected to drop to $10.50 per bushel. If old crop prices increase on a pickup in exports, new crop prices may be dragged with it for a while. I would have up to 10% priced on 2013 production. I think there may be an opportunity for additional pricing at higher levels or an opportunity to put in place an option strategy.
Wheat:
Nearby:
| Wheat |
Price |
Change |
| May | $7.18 ¾ | -$0.29 ¾ |
| Support | $7.08 | -$0.17 |
| Resistance | $7.37 | -$0.19 |
| Technical | Strong Sell |
= |
| 20 Day MA | $7.60 | -$0.10 |
| 50 Day MA | $7.78 | -$0.10 |
| 100 Day MA | $8.26 | -$0.09 |
Weekly exports were above expectations at net sales of 27.8 million bushels (25.7 million bushels for 2012/13 and net sales of 2.1 million bushels for 2013/14).
New Crop:
| Wheat |
Price |
Change |
| July | $7.23 ½ | -$0.27 ½ |
| Support | $7.14 | -$0.16 |
| Resistance | $7.40 | -$0.17 |
| Technical | Strong Sell |
= |
| 20 Day MA | $7.63 | -$0.11 |
| 50 Day MA | $7.83 | -$0.11 |
| 100 Day MA | $8.22 | -$0.04 |
The weather system going through the Plains dropped much needed moisture to a dry area and pressured prices. The Ag Outlook Forum projected a more or less neutral scenario as it estimated that 56 million acres of wheat planted with 46.5 million acres harvested. A national yield of 45.2 bu. per acre would produce 2.1 billion bushels. Usage is projected at 2.282 billion bushels which would leave carryover at 639 million bushels and an average price of $7.00 per bushel. I am currently priced 10% on the 2013 crop.
