|
Price |
Change |
|
| U.S. Dollar |
82.78 |
+0.41 |
| Crude Oil |
91.78 |
+1.10 |
| Dow |
14,397 |
+307 |
Cotton and soybean prices are up while corn and wheat prices are down for the week. The Dow Jones closes out the week at an all-time high. The jobs report released today was favorable with unemployment dropping from 7.9% to 7.7%. USDA released their monthly supply & demand report with mixed market reaction. Corn and cotton prices closed up today with wheat about even and soybean prices down 2 to 9 cents. The CME Group announced earlier in the week new trading hours. Subject to CFTC approval and starting April 8, the pit and electronic session will start at 8:30 a.m. Central and last until 1:15 p.m. The electronic session will then start at 7 p.m. and go until 7:45 a.m. the next day.
Corn:
Nearby:
| Corn |
Price |
Change |
| May |
$7.03 ½ |
-$0.05 |
| Support |
$6.78 |
-$0.11 |
| Resistance |
$7.00 |
-$0.14 |
| Technical |
Sell |
= |
| 20 Day MA |
$6.95 |
-$0.09 |
| 50 Day MA |
$7.08 |
-$0.01 |
| 100 Day MA |
$7.23 |
-$0.02 |
Weekly exports were below expectations with net sales of 6.2 million bushels (net sales reductions of 1.9 million bushels for the 2012/13 marketing year and 8.1 million bushels of net sales for the 2013/14 year). Ethanol production dropped 7,000 barrels per day to 805,000 barrels per day in the latest report. USDA left ending old crop stocks unchanged at 632 million bushels compared to the average trade guess of 643 million bushels. Corn imports into the U.S. were bumped up 25 million bushels to 125 million bushels while exports were decreased 75 million bushels reflecting the slow pace of sales and shipment along with stronger expected foreign competition. Offsetting those changes was a 100 million bushel increase in corn for feed coming from continued expansion in the poultry industry. The stocks to use ratio remained at 5.6% with a season average price range of $6.75 – $7.45 a bushel. Global stocks dropped 22 million bushels to 4.625 billion bushels. Prices responded favorably to today’s report.
New crop:
| Corn |
Price |
Change |
| September |
$5.71 ¼ |
-$0.13 |
| Support |
$5.56 |
-$0.15 |
| Resistance |
$5.73 |
-$0.15 |
| Technical |
Strong Sell |
– |
| 20 Day MA |
$5.78 |
-$0.09 |
| 50 Day MA |
$5.97 |
-$0.06 |
| 100 Day MA |
$6.24 |
-$0.05 |
With no real information in today’s USDA report to affect new crop prices, they were pulled upward along with old crop. 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. If prices move to the $6 range, that may present a good opportunity.
Cotton:
Nearby:
| Cotton |
Price(cents) |
Change |
| May |
86.88 |
+1.48 |
| Support |
84.57 |
+1.13 |
| Resistance |
89.93 |
+3.15 |
| Technical |
Strong Buy |
= |
| 20 Day MA |
84.30 |
+1.02 |
| 50 Day MA |
81.10 |
+1.00 |
| 100 Day MA |
77.67 |
+0.68 |
| AWP |
71.23 |
+2.48 |
All cotton weekly export net sales were 241,500 bales (150,200 bales of Upland cotton net sales for 2012/13; net sales of 67,100 bales of Upland cotton for 2013/14; and net sales of 24,200 bales of Pima cotton for 2012/13). USDA again increased exports by 250,000 bales to drop ending stocks to 4.2 million bales and a 26% stocks to use ratio. World stocks dropped 120,000 bales to 81.74 million bales. Chinese stocks increased 1.50 million bales to 44.11 million bales while the rest of the world’s stocks dropped 2 million bales to 37.63 million bales. Cotton prices responded favorably to the jobs report but also held on to close up for the day.
New crop:
| Cotton |
Price(cents) |
Change |
| December |
86.39 |
+1.25 |
| Support |
84.47 |
+0.73 |
| Resistance |
87.61` |
+1.51 |
| Technical |
Strong Buy |
= |
| 20 Day MA |
84.24 |
+1.03 |
| 50 Day MA |
81.59 |
+0.75 |
| 100 Day MA |
79.33 |
+0.50 |
Cotton prices continue to move up slowly on an anticipated U.S. acreage reduction while keeping a wary eye on world stocks and China. December traded as high as 86.65 cents today. I would continue to monitor new crop prices and be ready to price part of the crop or implement an option strategy if prices look to break. An 86 cent put option would cost 6.07 cents and set a 79.93 cent futures floor. Cotton equities on 2013 loan cotton look to end the week in the 27 – 27.5 cent range.
Soybeans:
Nearby:
| Soybeans |
Price |
Change |
| May |
$14.71 |
+$0.27 ½ |
| Support |
$14.34 |
+$0.14 |
| Resistance |
$15.03 |
+$0.74 |
| Technical |
Strong Buy |
+ |
| 20 Day MA |
$14.44 |
-$0.02 |
| 50 Day MA |
$14.29 |
+$0.05 |
| 100 Day MA |
$14.32 |
+$0.01 |
Weekly exports were above expectations with net sales of 50.8 million bushels (net sales of 14.4 million bushels for 2012/13 and net sales of 36.4 million bushels for 2013/14). USDA made no changes in today’s supply and demand’s U.S. numbers, leaving ending stocks at 125 million bushels and a 4.1% stocks to use ratio. The trade was expecting a slight drop to 120 million bushels. Although export sales are ahead of the pace to exceed projections, they are expected to decline in the months ahead from stiff South American competition. Currently, shipments from Brazilian ports are back logged as well as slow movement of soybeans to market. Old crop exports could exceed projections if the delays continue much longer, but still a large South American crop will eventually be available. World stocks were raised 3.3 million bushels to 2.212 billion bushels.
New crop:
| Soybeans |
Price |
Change |
| November |
$12.68 ½ |
+$0.07 ¼ |
| Support |
$12.47 |
+$0.02 |
| Resistance |
$12.93 |
+$0.21 |
| Technical |
Strong Sell |
= |
| 20 Day MA |
$12.70 |
-$0.16 |
| 50 Day MA |
$12.91 |
-$0.02 |
| 100 Day MA |
$13.03 |
-$0.04 |
Demand for new crop soybeans has been strong at current prices particularly from China. However, moisture situations across the Midwest seem to be improving and have been negative on new crop prices. 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. If the market can get back to $13, I would closely at prices in that range.
Wheat:
Nearby:
| Wheat |
Price |
Change |
| May | $6.97 | -$0.23 ½ |
| Support | $6.80 | -$0.20 |
| Resistance | $7.11 |
-$0.26 |
| Technical | Strong Sell |
= |
| 20 Day MA | $7.23 | -$0.18 |
| 50 Day MA | $7.55 | -$0.12 |
| 100 Day MA | $8.12 | -$0.09 |
Weekly exports were well above expectations at net sales of 30.4 million bushels (22.7 million bushels for 2012/13 and net sales of 7.7 million bushels for 2013/14). USDA increased old crop ending stocks 25 million bushels from last month to 716 million bushels. The trade on the average was expecting stocks of 704 million bushels. Exports were lowered 25 million bushels as the only change made. The stocks to use ratio increased to 29.5%. Global stocks were increased 55 million bushels to 6.549 billion bushels.
New Crop:
| Wheat |
Price |
Change |
| July | $6.98 ¾ | -$0.23 ½ |
| Support | $6.83 | -$0.19 |
| Resistance | $7.13 | -$0.25 |
| Technical | Strong Sell |
= |
| 20 Day MA | $7.26 | -$0.18 |
| 50 Day MA | $7.60 | -$0.11 |
| 100 Day MA | $8.08 | -$0.07 |
New crop wheat prices will be heavily dependent on the condition of the Plains wheat crop as it breaks dormancy. The market is expecting conditions to have improved with the recent moisture of the last few weeks. Also playing into prices will be whether U.S. wheat prices are now more competitive with foreign competition and whether exports will pick up as the marketing year winds down. I am currently priced 10% on the 2013 crop.
