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December 2013 Archive for Hedging Corn and Soybeans

RSS By: Howard Tyllas, AgWeb.com

Howard Tyllas is currently a member of the Chicago Board of Trade and registered with the Commodity Futures Trading Commission as a floor broker and as a Commodity Trading Advisor.

Hedging Corn and Soybeans for 12/20/13

Dec 21, 2013

  

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Attention Corn & Soybean Producers:


Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account. 
Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40 years. 

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This report was sent to subscribers on 12/19/13 3:30 p.m. Chicago time to be used for trading on 12/20/13.

December 2014 Corn


After the close recap on 12/20/13: My resistance .00 1/2 from the actual high, and my pivot acted as support was .02 1/4 (only .01 1/2 in open outcry) from the actual low.

March 2014 Corn

After the close recap on 12/20/13: My resistance was .00 3/4 from the actual high, and my pivot acted as support and was .02 (only .00 1/2 in open outcry) from the actual low.

All charts and numbers for 12/23/13 have already been sent to subscribers at 3:50 pm. 

December 2014 Corn

  
4.67 ¼ FG 
4.62 ½                               
------------4.57 ¾        Pivotal Downtrend Line 
4.52 ¾  
4.48 ¾  
      
5 day chart….     Down from last week same day          
Daily chart …     Down   
Weekly chart…  Down         
Monthly chart…Down                     5.14 is the 200 DMA
ATR 7                                                     Balanced 50%
  

 

For 12/20/13: "October high of $4.90 and the 2013 low at $4.50 could be the sideways trading range. Pivot of $4.70 is resistance". Downtrend line now acts as resistance again.  

In my daily December 2014 corn numbers on Thursday my resistance was .01 ¾ from the actual high, my pivot acted as support and was .01 ½ (only .00 ¼ in open outcry) from the actual low.                               


March 2014 Corn      
                                          
     
4.40 ¾                         High this month                              
4.35                            
-------------4.29 ½       Pivot   
4.24 ¼                               
4.20 ½                              
                            
5 day chart….      Down from last week same day                                                                    
Daily chart   …    Down                               
Weekly chart …  Down                       
Monthly chart …Down               5.01 is the 200 DMA
ATR 7 ½                                            Balanced 50%
     

 

For 12/20/13: $4.40 ¾ is strong resistance, 2013 low, then $4.10, and then the 2010 low of $3.98 ¼ major support (Custer’s Last Stand).     
         
In my daily March 2014 corn numbers on Thursday my resistance was the EXACT actual high; my pivot acted as support and was .01 ½ (only .00 ¼ in open outcry) from the actual low.                                                                                               

2012 low was $5.11 FG, 2011 low was $5.10 (now resistance), and 2010 it was $4.  

12/20/13:

Grains: After 2014 corn posted a new low for the year on Monday, the next 3 days were followed with a higher high and a higher low which is supportive. March corn had the same action but did not make a new low on Monday. We know these supports should hold until year end as we wait for the Jan Final report, but were not surprised when corn "jabbed" below the previous low for the year. $.15 off the low in March corn would be $4.33 ¾ and that is also $.16 off the high this month, and where my guess is for the year end settlement price. If not, I would think it would be lower, not higher than there. I said long ago once the $5.10 low of 2011 and 2012 is broken, we look to test the $3.98 ¼ low of 2010 before year end; we did get to $4.10, close enough considering we started our hedge at $6.50 100%. Most initiated 100% there, but the most bullish producer threw in the towel at $6.10.

Soybeans once again this week held the support of $13.11 as well as held the resistance of $13.53 ½. November stays in the middle of its sideways range. Nothing has changed.

Normal subdued trade next week in holiday mode. Our hedges are solid for 2013 as well as being 100% hedged 2014 corn at $5.60 with the most bullish producer throwing in the towel at $5.10. We are more concerned with not having to buy more protection than what more we will make if it rallies. 2014 hedge is easy to get upside back with 1 year until expiration. We will always make more money if it can rally, and with the 2013 hedge the ability to roll calls ... Subscribe now! This is how you reflect YOUR thoughts and ideas, and how you control your up and downside. 

Nothing more to say, no news will change the market right now, and your hedge is your peace of mind. Best of all the put protection was paid for with the call sold or will be on the roll to Feb. As always, you know how to improve your up and downside cheaply, do so when NEEDED, and can do when WANTed.

I still say "I prefer to take the sell signals today and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea. Do not expect more than the average trading range, look for subdued trading, and expect more of the same until after the New Year".   

12/19/13:

Grains: It continues to seem like it is their bat, their ball, and they are controlling the game. Long beans short corn has worked well all year, as a matter of fact you could buy just about anything including dog food futures contracts and sell corn and you would not be bad off. Corn looks destined to be $3.50 by June weather permitting, and a year from today with a decent crop let alone above trend yield which would lead to $3. Problems will only bring it back to the lows of 2011 and 2012 which is our bracket line at $5.10. Over the years you have seen the power of my bracket lines, as well as how I draw them. You have learned over the years how one in the hand is worth more than two in the bush. You hedge to get that one in the hand, so you have money to eat, as you hunt for the two in the bush (the upside).

The bull has demand and tight current supplies to support the soybeans market, but that fundamental will soon be bumping up against new ample supplies coming out of SA in April. Like I warned you in corn, when the funds decide the party is over, their long position will turn into a short position and the market will act like corn has the last 16 months (that is how long we have been short corn, and still are). Who will take the other side of that trade? The end users, not a chance, look at the corn market, it will be no different.

With soybeans sustaining a 3 to 1 ratio over corn I am impressed, but in time this will be looked at as an opportunity to buy corn and sell soybeans.

I would rather be "Texas spread" and be short both soybeans and corn. Lines in the sand are clearly drawn, and the longer you have had my service the less you care about the fundamentals and care more about the price. Getting what you do right (your hedge) is the only thing you want to get right, not what the fundamentals are, not what Mother Nature will do, not what demand will be, no, you have learned like me as a trader that only the price puts money in your pocket or takes it away. Even if you did want to get those other things right, it comes right back to what we are doing with our hedge, they need a plan in place if they are wrong, and this most important factor of protecting losses they failed miserably. I have said to you since day one of this service, the only thing the fundamentals will do for you, is justify losing more money in a losing trade. I am not saying to not have an opinion of what the fundamentals are, you can use them to help you select the strike prices that will reflect those "what if’s", but finding those strike prices no matter if you use the fundamentals or not always comes back to the chart.

Next week is Jan option expiration and there will be cheap opportunities to take advantage of before then. If you have not... Cheap premiums show the small probability for corn to rally. Feb calls premium collected should have paid for your put spread in full depending on what strikes you selected. March calls sold will be "profit", if we get the chance to sell them.

I still say "I prefer to take the sell signals today and risk $.03 in corn and $.05 in soybeans using a stop to protect. Do not expect more than the average trading range, look for subdued trading, and expect more of the same until after the New Year". 

12/18/13:

Grains: Soybeans keep trying to take out the resistance at $13.53 ½ to no avail. Bulls certainly have had multiple times to take profits here, as well as bears being able to sell it. Last 4 weeks this resistance has held, as well as $13.11 support. That is what I call recent sideways action. Looks like that will be our range through the end of the year. November soybeans have been in a sideways range for almost 3 months. I do not look for soybeans to break out of that range anytime soon, and the chart bias indicates in time the range will break the downside. We would like to see higher prices; you know that can only help us, so it is your duty as the protector of risk to defend the downside which will cause losses. Not making money is one thing, losing money is another. You are in control now, you bought the protection you need, and have upside open that can easily get more for no cost when you roll. The day you think you need more up or downside, morph it.

Corn held the lows of the year, and could be trying to build a base of support this week. I still look for the market to end the year $.15 off the bottom, until next year when we grind lower once again. Feb calls gained about $.01 on the same strike Jan calls, and the market is cooperating with us hovering near $4.30. The higher the better when you roll to Feb selling corn calls. Also the closer we get to next Fridays expiration, the better.

Slow markets generally drag lower, and that is what I am looking for. Rallies are always to be sold in both 2013 and 2014 crops until the bear corn trend ends, or until the soybean sideways pattern trend ends.

My price forecast from now until year end is still intact. I still say "I prefer to take the sell signals today and risk $.03 in corn and $.05 in soybeans using a stop to protect. Do not expect more than the average trading range, look for subdued trading, and expect more of the same until after the New Year".    

12/17/13:

Grains: When I look at the fundamentals, I do not see how anyone can think corn will go higher in the next 6 months without a production shortfall. I am bearish and will remain bearish until something changes. Same for soybeans, longer term old and new crop 2014 soybeans should buckle under SA and next year’s US production, so as time goes on so does the lower prices as seen in the 2014 crop. The tightness seen now has been factored in being over $1.75 in premium to the November contract. In time if held long enough, it will be worth what the November is, just like $8.49 corn is now worth $4.20. It is not wine, you cannot say this is 2012 corn and worth more than 2013 corn. So that is what you see in the Jan beans, short term tightness that will disappear in time and the transition from too little supplies to more than adequate. In a year or two it can be as burdensome a supply as corn is getting to be. 

2014 corn did make a new low for the year, and we will see if it can hold, and then we will look for a $.15 or so bounce to end the year. It has more chance to go lower, and when the March contract makes its low and my guess would be the Dec low of $4.10 that will be it for this year and close out the year at $4.25. If things change and I think different, I will let you know. When corn can get above a previous month high, it might have something going for it. I do not need to know the reason.

Jan soybeans found resistance as I had said using the pre-report high of $13.53 ½ but my resistance of $13.47 was spot on being only $.03 ½ from the high on Monday. I like selling that but when numbers are that close I like my stop to be above $13.53 ½ where I am proven wrong (resistance numbers did not hold).

We know where resistance is in Jan soybeans ($13.53 ½), and we know support is $13.11, so $13.32 is the pivot of the two. I look for more continued sideways action that eventually will probe the downside and test the uptrend line at $12.80 next. I am waiting for more premiums to decay before wanting to roll or sell cash, unless we are above your put which allows you to market at any time. There is premium in the put spread you sell, and cost little to buy back the call, and you should have made money since your Jan hedge was put on. There are many things you can do to reflect your bullishness or bearishness when you roll if you are planning to keep soybeans after the Jan options expire.

You are long where your put coverage ends, imagine being unhedged. Why worry about being long above your put strike if you are now worried about being long where your protection ends? If your thoughts are different now, morph it, and you can get more protection cheaply.

Do not look for much in holiday trade. Know what you need or want to do, wait for the opportunity, and execute it. If it does not give you an opportunity, have a line in the sand to throw in the towel and save yourself from further beating, and you can pick a match when you want to fight again. My strategy allows for "at the money" upside if it can go higher, but provides insurance if it goes down instead.  

I still say "I prefer to take the sell signals today and risk $.03 in corn and $.05 in soybeans using a stop to protect. Do not expect more than the average trading range, look for subdued trading, and expect more of the same until after the New Year". 

Hedge Ideas: 12/16/13

I said many times that I have no problem looking to sell at a higher price; I have a problem risking more money than I was willing to make. You have learned this, as well as having lines in the sand price wise and not concerned with your fundamental analysis. When you are being choked, you want it to stop before you die, not a second afterward when it does you no good.

Every month holding corn has been a bloodletting and is no surprise. Price action has given bulls no reason to think the trend would reverse, but yet bulls must have been "hoping" for a $.50 rally to unload. Trouble is every month has seen a lower high and the longer you hold it waiting for the trend to change, the more you lose than what you were going after.

How many times in my service have I said that you can sell now because in the future the rally might only get you what you can get now. With the proper strategy that you are in fact using, you are able to have upside right here while you have protection. If it is cost, shop option prices and find what fits your NEEDS and then your wants.     

When you make a decision, never look back and say it was the wrong thing to do, because the day you think that is the day you should change your position. Never should you even think the words woulda coulda or shoulda because now after all these years it does not just mean you are not doing what you are supposed to do, it means you are the old lady at the track who has lost touch with reality.
If the market continues lower it was good to have rolled corn to Feb, but unless we go too much lower it is still a good idea to capture more money. Buying back cheap Jan calls would be a good way to reflect your desire for the upside, and then sell the Feb call if it can rally. Realize, what you do not sell is what YOU are buying. If you are not in conflict with yourself decisions are easy, when you cannot decide, "Goldilocks’" it. If there is a "next rally", look at buying protection down to $4.10. If friendly I would rather not buy more protection but I would sell as much upside away as I can when I roll.

Jan soybean hedges are in place and most only allowed $.10 or $.20 upside electing to have sold a Jan call for the second time (took profits the first time). In 2 weeks you will need to roll to Feb calls and puts unless you think you will need more time, then ...

November 2014 soybeans I have recommended for a long time to be hedged, if you did not you have your own plan, follow it, and never put your head in the sand on any idea, always have a risk when going after a reward. Hedging does not take away rewards, but takes away some risk. Let me know, I will look over your shoulder and help you price it when you are ready.

Want to know what I think for tomorrow and going forward?


The markets covered daily are 2013 & 2014 Soybeans and Corn.


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WASDE Report 12/10/13

Dec 10, 2013

 WASDE Report 12/10/13 

Sign up: Learn a better way to hedge for free

 
Attention Corn & Soybean Producers:


Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.
Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40 years. 

Sign up: Free 1 Day Trail of My Daily Numbers & Hedge Ideas 

 

OILSEEDS:  Total U.S. oilseed production for 2013/14 is projected at 96.44 million tons, down slightly due to a small reduction in cottonseed.  Although soybean production remains unchanged, 2013/14 supplies are raised 10 million bushels on stronger-than-expected early season soybean imports.  Soybean exports are increased 25 million bushels to 1.475 billion reflecting record commitments (shipments plus outstanding sales) through November.  Soybean crush is raised 5 million bushels to 1.690 billion as strong foreign demand for soybean meal, led by the European Union and Southeast Asia, more than offsets a reduction in domestic soybean meal use.  Soybean oil supplies are increased in line with higher crush.  With total use unchanged, soybean oil stocks are increased 55 million pounds to 1.69 billion.  Although total use is unchanged, soybean oil used for methyl ester is projected lower reflecting expanded production of non-ester based renewable diesel.  Soybean ending stocks for 2013/14 are projected at 150 million bushels, down 20 million from last month.

Prices for soybeans and soybean meal are projected higher this month.  The U.S. season-average soybean price range for 2013/14 is projected at $11.50 to $13.50 per bushel, up 35 cents on both ends of the range.  The soybean meal price is projected at $400 to $440 per short ton, up 25 dollars on both ends of the range.  The soybean oil price range is projected at 38 to 42 cents per pound, down 2 cents on both ends.

Global oilseed production for 2013/14 is projected at 502.3 million tons, up 2.9 million tons from last month.  Foreign oilseed production accounts for most of the change with increases for soybeans, rapeseed, and palm kernel only partly offset by reductions in cottonseed, sunflowerseed, and copra.  Global soybean production is projected at a record 284.9 million tons, up 1.4 million due to increases for Argentina and Canada.  Argentina production is projected at 54.5 million tons, up 1.0 million due to higher projected area.  Global rapeseed production is projected at a record 70.0 million tons, up 2.1 million due to gains for Canada and Australia. Canadian rapeseed production is raised 1.9 million tons to 18.0 million based on the latest survey results from Statistics Canada.  Favorable conditions throughout the growing season resulted in record rapeseed yields this year.  Other changes this month include lower sunflowerseed production for Argentina and increased cottonseed production for Pakistan.

Global oilseed trade is projected at 128.3 million tons, up 1.6 million from last month.  Increased soybean exports from the United States and increased rapeseed exports from Canada account for most of the change.  Global oilseed ending stocks are projected at 82.8 million tons, up 2.1 million as lower soybean stocks in the United States are more than offset by increased soybean stocks in Argentina, Canada, the European Union, and Russia, and higher rapeseed stocks in Canada and Australia.

WHEAT:  Projected U.S. wheat supplies for 2013/14 are raised 10 million bushels this month with higher projected imports.  Record production and higher exports for Canada are expected to add to wheat supplies in the United States.  Imports are raised 5 million bushels each for Hard Red Spring (HRS) and Soft Red Winter (SRW) wheat.  Projected exports for all wheat are unchanged, but minor adjustments are made by class with SRW wheat exports raised 5 million bushels and HRS wheat exports lowered an offsetting amount.  Projected ending stocks are raised 10 million bushels.  The 2013/14 projected season-average farm price is lowered 10 cents at the midpoint with the range narrowed to $6.65 to $7.15 per bushel as near record world supplies and increased export competition reduce price prospects for U.S. wheat.

Global 2013/14 wheat supplies are raised 5.3 million tons to 887.3 million.  This is up 32.1 million tons from last year, but 9.0 million tons below the record supplies of 2011/12.  Global 2013/14 production is raised 5.0 million tons with most of the increase for Canada based on the latest Statistics Canada estimate which put production at a record 37.5 million tons.  This is up 4.3 million tons from last month’s forecast and 5.4 million tons higher than the previous record in 1990/91 as excellent summer weather and an extended growing season boosted yields to record levels.  Production is also raised for Australia, up 1.0 million tons to 26.5 million, slightly above the recent forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences.  Production is also raised 0.4 million tons for 2012/13 reflecting recent revisions to last year’s crop by the Australian Bureau of Statistics.  Partly offsetting this month’s 2013/14 increases is a small reduction for the European Union as the latest statistical reports lower output for Denmark, but raise output slightly for the Netherlands and France.

Global wheat trade for 2013/14 is raised this month with larger available supplies in key exporter countries and stronger demand expected for several importing countries.  Exports are raised 1.5 million tons for Canada, 1.0 million tons for the European Union, 0.5 million tons for Australia, and 0.2 million for Turkey.  Imports are raised for Egypt, Bangladesh, Mexico, Azerbaijan, South Korea, Syria, and Turkey.  Most of the increase in exportable supplies is from higher production in Canada and Australia; however, in the European Union higher corn imports and feeding are expected to free up wheat to support the strong ongoing pace of sales and shipments.  Wheat feeding is increased for Canada, Egypt, and South Korea.  Wheat food use is raised for Bangladesh and Syria.  Global wheat ending stocks are projected 4.3 million tons higher mostly on increases for Canada and Australia.

COARSE GRAINS:  Projected U.S. feed grain supplies for 2013/14 are raised slightly this month with a 5-million-bushel increase projected for corn imports.  With a record crop now estimated for Canada, additional quantities of Canadian corn are expected to find their way into the U.S. market.  U.S. corn use for 2013/14 is projected higher with increases for food, seed, and industrial use and for exports.  Corn used in ethanol production is projected 50 million bushels higher reflecting the strong pace of weekly ethanol production since mid-October.  Exports are also projected 50 million bushels higher based on the pace of sales to date and higher expected global consumption.  Projected U.S. ending stocks are lowered 95 million bushels. 

The 2013/14 season-average farm price for corn is projected 10 cents lower at the midpoint with the range narrowed to $4.05 to $4.75 per bushel based on prices reported to date.  Average prices received by farmers, however, are expected to continue to be reported above prevailing cash bids well into early 2014 as some sales will reflect the higher forward prices available before harvesting.

Global coarse grain supplies for 2013/14 are projected 3.6 million tons higher.  At 1,420.5 million tons, supplies are up 122.8 million from 2012/13 and 103.1 million above the previous record in 2011/12.  Corn accounts for more than 80 percent of the increase over this period with 2013/14 world corn production up 101.4 million tons from last year.  Global corn output for 2013/14 is raised this month with Canada and Ukraine increased 1.1 million tons and 1.0 million tons, respectively.  Partly offsetting are 0.4-million-ton reductions for both the European Union and Kenya.  World barley and oats production are also raised, up 1.7 million tons and 0.8 million tons, respectively.  Barley production is raised 1.2 million tons for Australia and 0.8 million tons for Canada.  Partly offsetting are small reductions for Iran and the European Union.  Oats production is raised 0.6 million tons for Canada with small increases also for the European Union and Australia.  World sorghum production is lowered 0.4 million tons with smaller crops projected for India and Australia.

Global 2013/14 coarse grain consumption is raised 4.3 million tons with half of the increase from higher foreign corn consumption.  Corn feeding is raised for Canada, the European Union, and Ukraine.  Foreign barley and oats consumption are also raised with increased barley feeding in Australia, Saudi Arabia, Iran, and Canada, and increased oats feeding in Canada.  Higher coarse grain production in Canada, Australia, and Ukraine support increased use for these countries and higher imports allow for the increases for the European Union and Saudi Arabia.   Global corn exports are raised 1.8 million tons with increases for the United States and Canada.  Global barley exports are raised 0.9 million tons with increases for Australia, Ukraine, and Canada.  World corn ending stocks are projected 1.9 million tons lower as the U.S. reduction is only partly offset by a 0.5-million-ton increase for Ukraine. 


SUGAR:  Projected U.S. sugar supply for fiscal year 2013/14 is decreased 217,000 short tons, raw value, from last month, mainly due to lower imports from Mexico.  Total use is increased, as all of the forfeited sugar held by the Commodity Credit Corporation is expected to be sold for non-human use.  However, domestic food use is lowered based on recent weaker-than-expected deliveries.  Ending stocks are lowered 423,000 tons from last month.

For Mexico, USDA is adopting recent projections by the government of Mexico for increased production and imports, compared with last month’s WASDE projections.  Domestic consumption is decreased also to match government projections.  However, USDA projects stocks nearly unchanged from last month.  Mexico projects higher exports to non-U.S. markets which more than offsets lower exports to U.S. markets.

For Mexico, USDA is adopting recent projections by the government of Mexico for increased production and imports, compared with last month’s WASDE projections.  Domestic consumption is decreased also to match government projections.  However, USDA projects stocks nearly unchanged from last month.  Mexico projects higher exports to non-U.S. markets which more than offsets lower exports to U.S. markets.

LIVESTOCK, POULTRY, AND DAIRY:  The forecasts for total red meat and poultry production for both 2013 and 2014 are raised from November.  For 2013, small changes are made to the fourth quarter for the major species, based on slaughter data to date.  The forecast for 2014 is raised based on higher expected cattle and hog carcass weights and higher cattle slaughter.  No change is made to 2014 broiler production, but the turkey production forecast is reduced based on hatchery data.  Egg production is reduced slightly for both 2013 and early 2014.

Beef imports are lowered slightly for 2013, but no change is made to 2014.  Beef exports are raised for both 2013 and 2014.  Pork imports are raised for both 2013 and 2014 based on estimates for the third quarter and early fourth quarter and expectations for slightly stronger imports in 2014.  Pork exports for 2013 and 2014 are reduced from last month based on slightly weaker demand in Asia. The 2013 broiler export forecast is lowered slightly based on exports to date, but the forecast for 2014 is unchanged.  Turkey exports are raised for 2013 but the forecast for 2014 is unchanged.

Cattle prices for 2013 and 2014 are raised from November as demand for fed cattle remains strong.  Hog prices for 2013 are lowered as fourth-quarter prices have been slightly weaker-than-expected.  The forecast for 2014 is unchanged.  Broiler and turkey price forecasts for 2013 and 2014 are raised from last month.  Demand for broiler meat is firm, supported by expected tight supplies of beef and moderate production increases.  Turkey prices are expected to be supported by slower forecast growth in production.  Egg prices are forecast higher for 2013 and 2014, reflecting current price strength and lower forecast production.

The 2013 milk production forecast is reduced slightly from last month, based on recent estimates of cow numbers.  The forecast for 2014 is raised as higher milk forecast prices and lower expected feed costs support a more rapid increase in cow numbers and output per cow. Fat basis imports are reduced for 2013 but are unchanged for 2014. On a skims-solids basis, imports are raised in 2013 but unchanged for 2014.  Exports are raised on a fats basis based on the strength of butterfat shipments to non-traditional markets.  On a skims-solids basis, higher nonfat dry milk (NDM) and whey exports are offset by lower lactose exports leading to a lower forecast for 2013, but for 2014, expected strength in NDM results in a higher skim-solids forecast.

For 2013, the cheese price forecast is reduced, reflecting current prices.  However, strength in current prices for butter, NDM, and whey resulted in higher price forecasts for those products.  For 2014, despite higher dairy production, demand strength in importing countries and improving domestic demand in the United States is expected to support prices for all products. The Class III milk price is unchanged for 2013 as lower forecast cheese prices offset higher whey prices but the forecast is raised for 2014 based on higher forecast cheese and whey prices.  The Class IV price forecast is raised for both years on higher butter and NDM prices.  The all milk price is forecast at $19.90 to $20.00 per cwt for 2013 and $19.70 to $20.50 per cwt for 2014.
 
COTTON:  This month’s U.S. cotton estimates for 2013/14 are virtually unchanged from last month.  Production is estimated at 13.1 million bales, as decreases for the Southeastern states are mostly offset by increases in the Delta.  The forecasts for domestic mill use, exports, and ending stocks also are unchanged.  The marketing-year average price received by producers is forecast to range from 70-78 cents per pound, unchanged at the midpoint but narrowed one cent on each end.

The world 2013/14 cotton estimates include higher beginning stocks, partially offset by lower production, raising ending stocks by less than 1 percent.  Beginning stocks are raised 1.0 million bales for India, based on prior-year reductions in India’s consumption from official sources.  Production is reduced for China and Benin, but is raised for Pakistan.  Global consumption is virtually unchanged, but world import demand is reduced due mainly to larger available supplies in India and Pakistan.

RICE:  Slight changes are made to the U.S. 2013/14 all rice and rice-by-type supply and use balance sheets. All rice imports are lowered 1.0 million cwt (all in long-grain) to 21.0 million based on U.S. Census Bureau data through October and expectations for the remainder of the marketing year.  U.S. 2013/14 beginning stocks and production are unchanged from a month ago.  U.S. 2013/14 rice total use is unchanged from last month—with domestic and residual use and exports forecast at 116.0 million and 100 million cwt, respectively.  The rice-by-class forecasts of domestic and residual use and exports are also unchanged from a month ago. All rice ending stocks at 30.2 million cwt are down 3 percent from a month ago.

The 2013/14 long-grain rice season-average farm price range is projected at $14.80 to $15.80 per cwt, up 30 cents on each end of the range from last month. The combined medium- and short-grain farm price range is projected at $16.80 to $17.80 per cwt, unchanged from last month.  The all rice season-average farm price is forecast at $15.40 to $16.40 per cwt, up 20 cents per cwt on each end of the range.

Global total supplies of rice for 2013/14 are lowered more than the decrease in total use resulting in a drop in world ending stocks.  Global rice production is projected at 470.6 million tons, still a record, but down 2.6 million from last month due primarily to lower forecasts for India and Thailand.  India’s 2013/14 rice crop is lowered 2.0 million tons to 103.0 million, still the third largest crop on record, due to the impact of torrential rains from a number of tropical cyclones and flooding in northeastern and southeastern regions.  Thailand’s 2013/14 rice production is lowered 0.6 million tons to 20.5 million, still a record, due to an expected decline in the dry-season or off-season rice crop.  Changes to Thailand’s off-season rice pledging program have cut intervention prices and eligible tonnage for each household by 13 percent making it less appealing to Thailand farmers.  The Philippine rice crop is still a record, but is lowered less than 0.1 million tons to 11.6 million due to the impact of Super Typhoon Haiyan.  Despite being one of the strongest storms ever recorded, crop damage from the typhoon is not expected to affect the nation’s rice supply as the impacted regions were not key producing areas, according to the U.S. Agricultural Counselor in Manila.

Global rice consumption for 2013/14 is forecast at a record 472.9 million tons, down 0.2 million from last month due mostly to a decrease in India.  Global 2013/14 exports are increased due to an increase of 0.5 million tons for Thailand, now forecast at 8.5 million.  World imports are also increased with the Philippines and the European Union up from last month, partially offset by lower imports for Iran and the United States.  World ending stocks for 2013/14 are projected at 104.3 million tons, down 2.2 million from last month, and a decrease of 2.3 million from the year earlier.  Ending stocks are lowered for the European Union, India, Thailand, and the United States. 


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