Markets: open cotton vulnerable
Oct 30, 2009 10:12 AM, By Ray Nabors, Heartland Ag Network
Domestic cotton use is now predicted to hit a 24 year low. Weak demand is weighing heavy on cotton prices. In light of cotton demand, the market is overbought.
Corn
Private corn production estimates have dropped to 2.25 billion bushels from 13 billion. Importers were waiting for a decline in corn prices to buy. Canada may need ethanol imports to meet government mandated fuel standards.
Harvest has been rain delayed again in many areas. Farmers are leaving corn standing in the field to harvest soybeans. Harvest is 20 percent complete. That is remarkably behind when 64 percent is the 10 year average.
Trader profit taking from market buy contracts forced prices down. Trading is light until weather effect can be ascertained. Inflation concerns are factored into prices. Importers are waiting on lower prices. Export inspections were below market expectations at 24 million bushels. Weekly export sales are expected to increase.
Wheat
Inflation support was more evident in wheat markets. The failure of inflation to materialize and falling corn prices put pressure on wheat prices. Profit taking by traders pulling money out of long market positions has spilled over from corn.
Winter wheat planting in the United States and world wheat planting intensions has dropped but current supplies are adequate to meet demand into the new crop year. The average winter wheat planting is 86 percent completed. This year planting is 76 percent complete. Planting intension will not be met.
Canadian harvest has rain delays, but Ukraine has harvested 94 percent of their grain. Ukraine increased grain export projections from 17 million tons to 20 million. Export inspections were 14.336 million bushels. Total export inspections are 5 percent behind average. Relative dollar values are gaining on other world currencies making U. S. grain more expensive overseas.
Rice
Harvest is about 85 percent complete and yields of early planted rice average 180 bushels per acre. It is unlikely yields will hold up. Late planted rice may have less potential and lodging after rains has become a problem. Weather has reduced quality and quantity of late planted rice.
Vietnam continues to undersell Thailand on rice markets. United States rice becomes more competitive when dollar values drop but that makes U. S. prices nearer Thailand prices than Vietnamese prices. Vietnamese prices are firming up putting support under U. S. rice market prices.
India eliminated their 70 percent import tax on rice. The suspension of import tax on rice is anticipated to last until the next rice harvest near September next year. This will support U. S. rice prices even if Asian supplies go to India. Other nations will buy more United States rice.
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