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February 2, 2001

MARKETING

By Bryce Myrick
Director, TFB Agricultural Marketing Education

What Does 2001 Hold for Commodity Prices? Sometimes markets will give us a good indication where they are headed over a three to six month time period. Last summer, live cattle were trading at $68-$69. The markets indicated prices would go up. Today, live cattle are selling at $79. In early fall, grain prices were down, but the market indicated a price increase. By Jan. 1, grains had made a good move up in prices.

Now what does the summer hold for our markets? Demand will be the key to live cattle prices. There are potential long-term problems for cattle prices much over $80. History tells us that summer grain prices are usually weak. Cotton prices seem to have no direction. Foreign markets and production will have some impact before we start planting.

With this in mind, I encourage you, as a producer, to learn the benefits of selling Call Options. Many of our commodities have high premiums built into Call Options. This is a good way to plan your marketing needs for 2001.

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.

JULY - COTTON

Fundamentals: Cotton marketing weak—West Texas gins still backlogged
Technical Analysis: Trend—Short-term Sideways/Resistance—64.00/Support—61.90

JULY - KC WHEAT

Fundamentals: Exports Weak—Crop condition uncertain
Technical Analysis: Trend—Up/Resistance—3.57/Support—3.39

APRIL - LIVE CATTLE

Fundamentals: Demand has been good—Inventory high
Technical Analysis: Trend—Up/Resistance—80.50/Support—77.80

JULY - SOYBEANS

Fundamentals: Large crop in South America—Exports still good
Technical Analysis: Trend—Down/Resistance—5.30/Support—Broke below 6 month support