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I feel the corn crop is out there!
9/14/2009
Corn: I’ve been on the road for the last 30 days. I’ve seen a lot of the corn country and have spoken to several producers. My overall impression is the corn crop is out there but it may be a little wet at harvest. You need to get your propane locked up and in position. My biggest concern is I sense there is still a lot of old crop corn still to be priced. As for the upcoming crop, I get the strong impression that a large percentage of the crop is still unsold. Producers are making plans to store which implies there is a big potential for a secondary harvest low out there in February or March. One should be preparing for less than expected basis narrowing and deferred contracts potentially falling to the nearby contracts.
In summary this is going to be a dangerous year to hold inventory in the bin unpriced and hope for better prices. I really believe the odds are better than 60/40 that corn will be put in the bin at harvest and will pulled out of the bin next July cheaper than when it was put in when all cost are included. This strongly implies that all hedges are going to be maintained and rolled rather than liquidated and holding grain in the bin unpriced.
Soybeans: I have to tell you I did not see anything that made me really bearish. Granted, I’m no expert on bean production but I know we have a lot of disease coming back into the beans. The overall height seems to be average and a lot of beans are still really green for this time of year. Overall, I see no reason for the USDA's last estimate to be exceeding and a lot of reason why it could drop a bit. So overall I’m supply neutral. So what about demand? The big bull (China) has already suggested they are not going to buy as much as they did last year. They have accomplished their objective of building domestic stocks. Second, they are keeping their prices high domestically to motivate producers to increase production.
Finally, all signs indicate that the South American producers are eager to regain the market share they lost to the U.S. last year. Overall, the supply engine is gearing up and the demand engine is going on idle. This would suggest it’s only a short time before world stocks build and prices to the producer come under pressure. In fact as an advisor I’m more worried about getting some pricing done on the November 2010 contract than the 2009 contract.
If you need any help in implementing a speculative or hedging strategy give us a call at 1-800-832-1488 or email me at utterback@utterbackmarketing.com
BEFORE TRADING, ONE SHOULD BE AWARE THAT WITH POTENTIAL PROFITS THERE IS ALSO POTENTIAL FOR LOSSES, WHICH MAY BE VERY LARGE. YOU SHOULD READ THE “RISK DISCLOSURE STATEMENT” AND “OPTION DISCLOSURE STATEMENT” AND SHOULD UNDERSTAND THE RISKS BEFORE TRADING. COMMODITY TRADING MAY NOT BE SUITABLE FOR RECIPIENTS OF THIS PUBLICATION. THOSE ACTING ON THIS INFORMATION ARE RESPONSIBLE FOR THEIR OWN ACTIONS. ALTHOUGH EVERY REASONABLE ATTEMPT HAS BEEN MADE TO ENSURE THE ACCURACY OF THE INFORMATION PROVIDED, UTTERBACK MARKETING SERVICES INC. ASSUMES NO RESPONSIBILITY FOR ANY ERRORS OR OMISSIONS. ANY REPUBLICATION OR OTHER USE OF THIS INFORMATION AND THOUGHTS EXPRESSED HEREIN WITHOUT THE WRITTEN PERMISSION OF UTTERBACK MARKETING SERVICES INC. IS STRICTLY PROHIBITED. COPYRIGHT UTTERBACK MARKETING SERVICES INC. 2009.
Tuesday, September 15, 2009 4:19 PM by: Anonymous
Last year, at this time, we weren't in the worst recession since the Great Depression - so he didn't miss it by a mile - no one predicted this downturn as bad as it is.
Tuesday, September 15, 2009 10:40 AM by: Anonymous
I agree, Bob does not have a clue. His opinions are designed to bring customers to his business and increase his bottom line, not the bottom line of his customers.
Tuesday, September 15, 2009 9:17 AM by: Anonymous
If I remember correctly Bob last year at this time, said that corn would be well supported on breaks to $5.00.He like so many advisiors missed it by a mile!Now he is telling us to sell at the bottom.I don't think he has a clue.Low prices cure low prices,demand is coming back.Prices are not going to go back to $5 real soon,but there will be rallies after harvest that will be substancial.Commercials that watched corn skyrocket last year won't make the same mistake twice.They should be getting their needs covered at these prices.
Monday, September 14, 2009 10:45 PM by: Anonymous
I agree with 9:18 theres no reason to give this one away. I think we all would be alright with a little lower prices had our inputs not been sky high.....
Monday, September 14, 2009 9:18 PM by: Anonymous
I think we should stuff the bins, take a gov loan and let the paperboys worry about getting the grain out of the bin.
Monday, September 14, 2009 7:44 PM by: Anonymous
You said a mouthful, you're not an expert on soybean production. You'll eat your words after harvest, Bob.
Monday, September 14, 2009 6:56 PM by: Anonymous
The frost that is coming on the 23th might adjust the yield enough so we might see an upturn is corn market.
The yield that is project by the USDA really does not mean much other then to traders trying to price corn.
Harvested acres will show the true picture and USDA is way too high on there projection. Your advice is just the opposite of what most people are saying. They say not to give away this crop because we work too hard to do it for free and to expect a 50 to 1.00 bushel bounce after harvest.
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