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eCOOPNEWS Volume 8 Number 2


Commodity Comment
Cotton futures ground down this week to new contract lows and levels not seen since 2009.  Trading volume was very good this week and it appears that aggressive spec selling was pushing prices down to levels where there was a lot of export business and mill fixations.  Today’s exports were once again well above expectations with 470k bales sold.  This even surpasses last week’s 440k which had been the previous marketing year high.  If this pace continues, USDA will have to raise exports on the next supply demand report which should give support to the market.  It seems that the negative macro commodity picture has outweighed any positive cotton news over the last two weeks.  A surging US Dollar and falling oil prices have put a damper on commodity prices and given specs a reason to short cotton.  Fundamentally, cotton is still bearish but at current levels demand has been very strong which could help us start to reduce some of the burdensome ending stocks.  For the week Mar cotton closed at 5730 down 197 pts.  The current LDP is 6.41 cents/lb but the one day projection for next week is 7.44.
Soybean futures saw similar action to cotton this week as the strong US Dollar is making US soybeans less competitive than other countries and thus pressuring prices.  The combination of the strengthening Dollar and increased acres next year could pressure soybean prices over the next few months unless a production problem in occurs in South America.  Right now the crop is in pretty good shape although it is getting dry and rain is needed soon.  Corn and wheat futures were little changed this week but needless to say if other commodity prices are coming under pressure from macro headwinds then grains will likely follow as well.  There isn’t a lot of news around right now for corn and wheat and that will allow outside forces to exert more influence over the next few weeks until we get closer to planting corn and wheat emerging from dormancy.  For the week, Mar corn closed at $3.86 unchanged, Mar wheat $5.30 down 2 cents and Mar beans $9.72 down 19 cents. 
                                                                        Wayne Boseman
                                                                        VP Brokerage


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