| Price | Change |
US Dollar | 80.54 | +022 |
Crude | 95.90 | +0.18 |
Dow | 13,972 | -21 |
Cotton prices are mixed while corn, soybeans, and wheat prices are down for the week. Markets will be closed Monday, February 18 for President’s Day. The USDA supply & demand reports released on February 9 were mostly neutral to friendly but other data and information has tended to overshadow those reports. There is no doubt that this year will be another year of volatile prices as the market tries to sort out potential weather problems, large acreages of corn and soybeans and a reduction in cotton acreage. Crop outlook, particularly for soybeans and grains is much the same as it was a year ago. Weather and possibly Chinese agricultural policy will most likely be the market drivers to watch. This is shaping up to be a good year to implement some type of option strategy. I encourage producers to learn more about options and considering using some of the strategies available. The basic strategy we look at is buying a put option which protects us in case the market moves down. This sets a floor price and if we can lock in a floor price that is profitable then it should be considered. Markets have quite a bit of risk this year.
Corn:
Nearby:
Corn | Price
$/bushel | Change |
May | 6.97 | -0.11 3/4 |
Support | 6.83 | -0.34 |
Resistance | 7.02 | -0.32 |
Technical | Strong Sell | - |
20 Day MA | 7.20 | -0.06 |
50 Day MA | 7.16 | -0.07 |
100 Day MA | 7.30 | -0.02 |
Weekly exports were within expectations with net sales of 11.2 million bushels (8.9 million bushels for the 2012/13 marketing year and 2.3 million bushels of net sales for the 2013/14 year). Ethanol production rose 15,000 barrels per day to 789,000 barrels per day in the latest report. USDA did project ending stocks at 632 million bushels, a little higher than expected.
New Crop:
Corn | Price
$/bushel | Change |
September | 5.82 1/4 | -0.02 1/2 |
Support | 5.70 | -0.08 |
Resistance | 5.92 | -0.16 |
Technical | Strong Sell | = |
20 Day MA | 6.02 | -0.09 |
50 Day MA | 6.17 | -0.09 |
100 Day MA | 6.36 | -0.05 |
I think it is a little too early for the new crop market to collapse with drought condition still existing in the western Corn Belt. Granted there is not any seed in ground, but that area looks to be starting out with little to no sub soil moisture. There is concern on just how much demand has been hurt with prices going into this year. Currently, I would have 10% of 2013 production priced. Target the $6.20 - $6.50 range for additional pricing or for an opportunity to implement an option strategy.
Soybeans:
Nearby:
Soybeans | Price
$/bushel | Change |
May | 14.14 3/4 | -0.22 |
Support | 13.84 | -0.82 |
Resistance | 14.31 | -0.53 |
Technical | Sell | - |
20 Day MA | 14.41 | +0.05 |
50 Day MA | 14.26 | +0.01 |
100 Day MA | 14.35 | -0.07 |
Weekly exports were below expectations with net sales at 8.7 million bushels (net reductions of 4 million bushels for 2012/13 and net sales of 12.7 million bushels for 2013/14). The market will closely be watching exports to determine whether cancellations like were reported this week will be the norm rather than the exception. USDA did project a drop in ending stocks to 125 million bushels, a tight 4.1% stocks to use ratio. However, the focus seems to be on the large South American crop which is starting to hit the world market. There are port issues with getting their crop shipped out and those delays will be to the U.S.’s advantage. January crush numbers of 158.2 million bushels reported by the National Oilseed Processors Association were 2.4 million bushels less than expected, but 10.8% above a year ago.
New Crop:
Soybeans | Price
$/bushel | Change |
May | 14.14 3/4 | -0.22 |
Support | 13.84 | -0.82 |
Resistance | 14.31 | -0.53 |
Technical | Sell | - |
20 Day MA | 14.41 | +0.05 |
50 Day MA | 14.26 | +0.01 |
100 Day MA | 14.35 | -0.07 |
With strong demand numbers and questionable weather, it is a little early for soybeans to drop dramatically. 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
$/bushel | Change |
May | 7.48 1/2 | -0.14 |
Support | 7.25 | -0.28 |
Resistance | 7.56 | -0.20 |
Technical | Strong Sell | = |
20 Day MA | 7.70 | -0.10 |
50 Day MA | 7.88 | -0.17 |
100 Day MA | 8.35 | -0.09 |
Weekly exports were well above expectations at net sales of 25.9 million bushels (23.9 million bushels for 2012/13 and net sales of 2 million bushels for 2013/14). USDA projected U.S. ending stocks at 691 million bushels, less than expected.
New Crop:
Wheat | Price
$/bushel | Change |
July | 7.51 | -0.11 3/4 |
Support | 7.30 | -0.27 |
Resistance | 7.57 | -0.18 |
Technical | Strong Sell | = |
20 Day MA | 7.74 | -0.10 |
50 Day MA | 7.94 | -0.15 |
100 Day MA | 8.26 | -0.07 |
Weather conditions are offering some support, considering that 59% of the winter wheat acreage is under drought conditions with 43% in areas rated as being in extreme or exceptional drought conditions. I am currently priced 10% on the 2013 crop and would consider targeting the $8.30 - $8.50 range for pricing opportunities.Click here to see more...