Markets: weather, dollar and energy
Oct 23, 2009 10:39 AM, By Ray Nabors, Heartland Ag Network
There is some speculation that some crop acres in the United States may not get harvested until next year. Lower relative dollar values are supporting increased grain exports. Higher energy prices are supporting biofuel prices.
Soybeans
Weather problems include quality decimation from diseases, lodging and high moisture. Oil and palm oil prices have been supportively higher. Farmer selling slows down each time prices drop.
Leaf drop advanced to 95 percent of the crop. Only 30 percent of soybeans are harvested compared to a 72 percent 5 year average.
Argentina predicts an increase of soybean acres by 7 percent this season. Argentine farmer planting intentions include 45 million acres of beans. South American soybean planting is under way.
Chinese harvest has started, making soybeans available from Chinese farmers. Decreased demand from China is expected.
Palm oil went up 2 percent and canola oil supplies are increasing with India’s harvest. India became the world’s largest importer of palm oil last week.
Last week’s exports sales of 987,305 tons exceed market expectations. Export inspections of 39 million bushels were in excess of market anticipations. Soybean crush of 114 million bushels were above expectations. Export shipments of 856,403 tons were bullish.
Corn
Corn selling by farmers has slowed again. Any increase in prices will stimulate increased selling.
Corn is 83 percent mature. Only 17 percent of corn is harvested where 46 percent is the five-year average. Farmers are concentrating on bean harvest. Most corn is mature and harvest postponed. Argentine farmers are expected to decrease corn acres this season.
Export sales the previous week of 631,000 tons were within market expectations and not enough to move prices. Export sales last week were under 250,000 tons and only half market anticipations. Export inspections of 24.6 million bushels barely met market expectations. Shipments this week of 818,000 tons were bullish.
Wheat
African and Asian nations are not buying U.S. wheat. They are buying European and Asian wheat.
Frost and drought are threatening Australian wheat production potential. Russia has harvested 99 million tons of grain, mostly wheat. Russian harvest is 91 percent complete and with 62 million tons of supply.
U.S. winter wheat planting is seriously behind. Late soybean harvest is limiting winter wheat planting. Some areas may not get wheat planted despite intensions. Export sales last week of 685,137 tons exceed market anticipations. Export inspections were 18.6 million bushels reaching the high end of market anticipation.
Rice
Vietnam continues underselling Thailand and the United States in the rice market. Supplies in Thailand are building. Rice exports remain slow and along with harvest pressure has a major price affect.
Rice harvest is one of the most difficult in memory but yields remain surprisingly high. As harvest delays continue, quality and yield concerns affect prices. Rice supplies will increase if yields hold up. Technical indicators are turning negative but rice will follow corn and wheat prices.
Cotton
Cotton is overbought. Harvest pressure is becoming apparent despite delays, questionable yields and lower quality. World supplies are tighter but harvest pressure has a limiting effect on price.
Bolls are now 86 percent open. Harvest is only 15 percent complete.
Trader open interest in cotton is rising as fundamentals strengthen.
Production estimates for the United States have dropped below 13 million bales. Chinese production estimates are down below 7 million tons. That is 2 million tons below earlier estimates.
Demand for white fiber remains weak. Weekly exports the previous week of 85,600 tons were anticipated but also disappointing. Last week’s exports of 48,171 bales were bearish. Shipments of 114,475 bales were a market year low and down 45 percent. China and India have signs of economic recovery.
e-mail: heartland.agriculture@yahoo.com
