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Texas Agriculture Archive

September 6, 2002

MARKETING

By Bryce Myrick

Director, TFB Agricultural Marketing Education

For three or four years, farmers have been asking, "When are we going to have higher grain prices?" Well, today we are in a grain rally. The Corn Belt is in a drought. While the market could, and hopefully will, go higher, corn is now over $2.50, wheat $4.00 and beans over $5.50 on the Board. Compared to $1.70, $2.30 and $4.00, this looks like a significant move upward.

What do we expect now and what will happen next year? Here are some things that are nearly a guarantee: (1) South America, the old Soviet Union countries, China, and India will plant more acres of grains. (2) The new Farm Bill encourages production. (3) Livestock numbers on feed will be smaller in 2003. (4) The Corn Belt will not stay dry. These four things suggest more production and less usage in 2003.

With this in mind, it may be prudent to hedge part of 2003's crop. If you need to discuss this scenario, please give me a call at 254-715-5055.

NOVEMBER - SOYBEANS

Fundamentals: Drought in Corn Belt

Technical Analysis: Trend - Up / Resistance - 5.79 / Support - 5.00

DECEMBER - CORN

Fundamentals: How big will 2002 crop be - 8.5 to 9.0 billion bushels?

Technical Analysis: Trend - Up / Resistance - 2.88 / Support - 2.72

DECEMBER - COTTON

Fundamentals: How big is 2002 crop?

Technical Analysis: Trend - Up / Resistance - 50.00 / Support - 44.60

OCTOBER - FEEDER CATTLE

Fundamentals: Demand good - Fat prices must come up

Technical Analysis: Trend - Up / Resistance - 79.50 / Support - 75.60