March 17, 2000

Will increased petroleum costs have an effect on our commodity prices? We know that increasing fuel prices will cause livestock and crop producers’ production costs to go up. The question is, will higher petroleum costs cause U.S. and foreign consumers to have less disposable dollars to spend on agriculture products? With Pacific Rim countries recovering from a recession, we do not want anything to happen that will cause a reduction in the buying of our agriculture exports.

Cattle prices continue to be strong. Watch to see if Japan decreases beef exports. Also, realize that breakeven prices on feedlot cattle continue to rise.

On the cotton front, world cotton prices have risen 12 cents since Dec. 17. That has caused us to have nine consecutive weeks of lower LDP payments. China’s planted acreage is predicted to be down 10 percent. World production looks to be 87-88 million bales. U.S. planted acreage estimates continue to rise. Billy Dunavant, Jr. raised his planted acreage and production estimates to 15.7 million acres and 19.2 million bales.

Doesn’t it make sense to hedge cattle and cotton at profitable prices when we have so much uncertainty?

To set up workshops or for help with your hedging needs, call 254-751-2242 or 915-698-0355 or e-mail: bbmyrick@swconnect.com.

DECEMBER COTTON



Fundamentals: Exports are Good.
Technical Analysis: Trend—Short Term Sideways; Long Term—Up/Resistance—3.23/Support—59.03

Fundamentals: Is there going to be rain in the Plains?
Technical Analysis: Trend—Up/Resistance—3.23/Support—2.96

Fundamentals: After a three week pull back, market is going up.
Technical Analysis: Trend—Up/Resistance—87.20/Support—85.30