Sunday, January 22, 2012
01:22 PM
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Sunday, January 22, 2012
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Grain Marketing Commentary
January 20, 2012
The commodity markets have stabilized and have bounced higher from last week’s USDA reports. The key going forward for the next 6 – 8 weeks will be the South America weather and exports, especially from China.
The weather forecasts near term seem to be projecting more wide spread rains for northern Argentina and southern Brazil. However, there is still a difference of opinion on how much damage has already been done to the corn and soybean crops. Some in the trade believe USDA will need to lower their production numbers in future reports. Also, February is still an important month for their second crop corn and soybeans. If it turns back to hot and dry, production will be cut more.
Exports have been good the past few weeks. China is back in the market and may continue to buy for a while. China needs to rebuild stocks. They are coming to the United States because they are concerned about a smaller crop from South America, and logistic problems getting enough corn and soybeans from the South American ports.
Technicals Corn
On Friday, prices pop higher and could be a catalyst for higher prices going forward. In the March contract, resistance is at $6.20 where several moving averages are converging with the next resistance area at $6.60. Price support is at $5.93 and $5.76. For December, support is at $5.48 and then $5.35. Resistance is at $5.68 and $5.90.
Marketing Corn
For all our crops, if you need to make sales and especially to take advantage of the strong basis, I would do it. If you are willing to take some risk, you may want to see if we can rebound prices to the resistance levels over the next few weeks.
Technicals Soybeans
The March contract is in trading range between $11.50 and $12.44. If prices can close above $12.00, then $12.44 is very possible. November is in similar trading range of $11.63 and $12.31. A close above $12.00 opens the door to $12.31. The next resistance is at $12.44.
Marketing Soybeans
Just as in corn, if you need to make sales I would take advantage of the good basis and do it. However, if you are willing to take some risk, I would see if prices can run up to $12.44 and then make some sales.
Technicals Wheat
The July 2012 futures made positive reversal on Friday which could lead to higher prices. First resistance is at $6.56 where several moving averages have converged and then 6.85 and $7.02. Price support is at $6.28 and $6.13.
Marketing Wheat
I would see if Friday’s reversal leads to higher prices and target $6.85 and $7.02 as price levels to add sales if needed.
Technicals Cotton
Cotton futures continue to have a nice rally after last week’s USDA report. The 10-day moving average is providing good price support for the March and December contracts. For three weeks in a row, the March and December contracts have traded above the 10-week moving average. From a technical stand point, there is a good uptrend in place and should result in higher prices.
In the March contract, price resistance is in the $1.00 to $1.02 range with the next resistance levels at the September highs of $1.11. Support is at $0.94, $0.90 and then at $0.84. December futures price resistance is at $0.94, $0.98 and then at $1.02. Price support is at $0.905 and $0.83.
Marketing Cotton
It is important for a cotton producer to remain in close contact with his cotton buyer to get the most current price quotes.
If you need to make sales, use the resistance levels at targets. If you are willing to take some more risk, you may wait and see if prices continue to move higher before making any additional sales.
Technicals Rice
The March futures contract is trading between the 25-day moving average at $14.43, and the 50-day moving average at $14.68. A break below $14.43 and the next support level is at $13.80. The next resistance levels above $14.80 are $15.20, and then $16.00. With the daily stochastic moving lower, the pressure on prices is to test $13.80. However, with more positive price outlook for the other grains, rice price should bounce back.
Marketing Rice
For cash rice quotes, contact your rice buyer to get the most current price quotes and cash price outlook.
From a technical standpoint, in the short term prices are under pressure to move lower. However, I believe there is still a good chance that prices will test $15.20.
Supply and Demand Tables and Charts for both the United States and World can be found on my web site, or the following links.
United States Supply and Demand
United States Ending Stocks to Use Graphs
World Production and Ending Stocks Graphs
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David Reinbott, reinbottd@missouri.edu Farm Management Specialist Last modified: January 22, 2012 |