NY futures rallied credibly since last report on July
04 Aug '06
3 min read
The worsening US crop seems to point in that direction. We don't know of anyone who still has the US crop over 20.0 mio bales and some private estimates even go as low as 18.0 mio bales. We take the middle of the road at the moment and believe that the crop is somewhere around 19.0 mio bales, which would still be nearly 5.0 mio bales less than last season.
The latest heat wave in the Delta and Southeast has not helped matters and we hear of many dryland acres that are cutting out. On the other hand some of the irrigated acreage in the Delta looks quite promising, which cautions us against getting too negative on the crop at this stage.
Given the tight foreign supply situation and the fact that the US crop is much smaller and relatively expensive without the help of the Step 2, we do not see any major pressure on prices anytime soon.
On the other hand, at current prices the NY futures market is once again the most attractive buyer and this will attract deliveries of old crop supplies to the board, which should cap the current rally within the next 50-100 points.
Unless the US crop deteriorates significantly over the next few weeks, we expect the market to trade in a range of somewhere between 55.00 - 58.00 cents in the foreseeable future.
marketing@alchempro.com
