The export sales report for the week ending July 26 bore this out as net weekly sales of upland for immediate shipment was 40,500 RB. Sales for the 2007-08 marketing season-which began August 1, were 255,300 RB. Pima sales for prompt shipment-before August 1, totaled 8,000 RB.
Pima sales for 2007-08 were 4,100 RB. Shipments were also strong at 454,000 RB, composed of 438,300 RB of Upland and 15,700 RB of Pima. Thus, U.S. exports will exceed the USDA estimate of 13.0 million bales and will total an estimated 13.2 million bales.
The drawn out process of writing a new farm bill has worked in favor of commodities. While there will be less money for agriculture, there is little sentiment outside the President and his Secretary of Agriculture to entirely abandon commodity titles.
Thus, the House of Representatives was successful in passing respectable farm legislation. The measure has now moved to the Senate with the President threatening veto action. Yet, it is doubtful he would take such action in the face of an upcoming election. However, the real battle in the Senate will be over payment limits. Those favoring reducing limits have grown stronger with each election. Maintaining the current limits has now become questionable.
Speculators, after taking profits two weeks ago, are now poised to take the market higher. A solid close above 65 cents would give them considerable confidence that the December contract could be pushed back to its recent highs. Conversely, a movement below 63.50 cents would open the gates to a selloff to 61-61.50 cents. Yet, a U.S. crop above 18.1 million bales will keep a heavy lid on prices.
marketing@alchempro.com
