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November 2008 Archive for Outlook Today

RSS By: Bob Utterback, Farm Journal

Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.

Beans move while wheat and corn stay flat

Nov 26, 2008
While the market had some movement in beans, the wheat and corn market was rather flat today. It should not be too surprising prior to the holiday. We want to note that that Friday will be a short trading day. Sometimes it’s really quiet and sometimes it’s very active.
We would caution everyone that the crude oil market had very powerful percentage move up today. The weekly energy report was neutral to slightly bearish to crude oil but was very positive to natural gas. This fact plus an upcoming Opex meeting, where the expectation is growing under pressure from Iran and other smaller Opex producers, indicates we will see another 1 million-barrels-a-day-reduction in production. The motivation is to drive up prices to stabilize cash flow.  (ie. They don’t really care that much about our economy—they need the money to keep their economy going.)  

So as we wrap up the month, our general opinion of the market has not changed. Any sustained upside potential in grains or oilseeds will depend first on stability in the equity market. We may be getting that. The next step is a stabilization of the energy market, we may be close to that point.  Then the final step will be confirmation that demand is stable and building. This is going to take some time. Overall, I want to buy July corn back below $3.80 while I will be looking to sell new crop beans above $9. As for wheat, I really want low $5 before I buy.  Finally, while cotton is very oversold, I believe we have some real conflicts of the fundamental. I would focus on buying December 2009 cotton in the low 40’s.

I hope everybody has a good holiday. I will be on vacation now for a couple of weeks. While I will be checking in with the office daily, my intent is to wind down a little. It’s been a long year and I want to take a mental time out before we start next year with it’s unique challenges. 

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Today was about profit taking

Nov 25, 2008
After yesterday’s strong price move, today was more about profit taking and getting ready for the holiday weekend. The tone continues to be wanting to sell strong rallies. We suggest you review our special report that we have at our web site by Dave Hightower. It’s an excellent article that reviews the overall fundamentals right now. If you can’t get on, call us for a free trial subscription at (800) 832-1488.

The warning flag I’m starting to put up to all clients right now is we still want prices we saw this summer. Many clients have put the crop in the bin and have no plan other than waiting for higher prices. I hear daily that the market is going to have to bid up for acres because of input cost.  But what if there are other commodities out there worse off than corn and beans and we get their acres? If this was not bad enough, what if domestic and international demand continues to over correct due to negative expectations about the global economy? The net result could be increasing carryover!

I’ve been saying it for many weeks but I’m now going to get more vocal. I don’t like new crop beans above current levels. I’m quite concerned that if we don’t watch it, we will have at least $7 in front of beans next fall and if we don’t watch out it could be $6. I’m trying to encourage producers to get a floor in place at current levels and only defend if and when we have a solid technical buy signal. At this time, I would refrain from buying puts because of the time value cost. My suggestion is get the cash sold if basis is stable and only buy back on paper if we get a clear technical breakout signal.

In regards to corn, I’ve been wanting to be a buyer at current levels but I’m starting to get concerned that feed usage and ethanol usage is going to keep a lot of pressure on prices. So at the current time, I’m waiting to add to long positions. If in position, I would start looking seriously at maximum risk that will be accepted. Essentially, limited upside potential if we confirm that planted acres will be unchanged to down, and then some type of spring or summer weather event starts to concern the trade about yield.

As to the outside markets, the equity markets have bounced recently with the announcement of the new Obama administration but further gains will be difficult until we see actual programs. The real story is the oil market and it was off over 5% today. Already the OPEX members want another meeting to discuss reducing supply. I note that some big investment houses and analysts are suggesting that oil could have significant downside risk until the end of the year. A correction back below $48 in lead month futures will send negative shock waves through the corn and bean market. So be careful if you are trying to develop an aggressive speculative long position.

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 
 

Weakness in the grains continues for Friday

Nov 24, 2008
Well it’s finally Friday and the equities have just survived one of the worst weeks in history. On a percentage base, it has been worse than the 1987 and 1929 crash.  There is no way of sugar coating this, it’s been rough. The big question now, is it over? While like you, I have some money in my 401K and would like to suggest the worse is over, my gut tells me we still have a lot more sideways to lower price action to deal with in the equities rather than a “V” bottom and sharp rally potential. The problems  ahead are default of credit card company and  potential bankruptcies of several main line companies, which eventually leads to job lay offs, more house defaults and potentially significant commercial defaults. Yes it’s bad and it’s going to take time to get through. The biggest worry I have is we panic and force the government to enact policies that help short term but really hurt the long term growth potential. 

In regards to agriculture, I continue to watch for a reversal down in the dollar and technical reversal up in the gold, equities and oil.  I’ve said it for several weeks and will continue to suggest until we see these trend reversals in outside markets we have limited hope of see a sustained rebound in the grains and livestock complex. One wants to hope we are close to a bottom because if we are not there is a whole lot of pain coming down the line for all producers with unsold production.

Special note: We just had some land sales of about 435 acres in our county . It was the old family farm which sold in 5 parts. It ranged from $4200 to $4700 per acre. Many people were surprised it was down so much. Early this summer it would have brought $6,000 plus. Just like some blue chip stocks, land is on the retreat, the big question everybody is asking, will it be a good buy a year from now?

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

The market is range bound!

Nov 19, 2008

The soybean market gapped higher today and appeared to be ready to take out overhead resistance at $9.20. Reasons being cited were the weakness in the dollar and strength in crude. The market however was not able to hold these gains and sold off clear down to the consolidation base that’s been holding the market in check at the $8.95 to $9 range.  The biggest bearish reason I’m starting to hear about is the potential bear market influence of reduced feed usage. Some analysts are suggesting significant reduction in poultry and all other livestock meal buyers over the next several months. The potential reduction could be as much as 60 million bushels of beans. Subsequently, the potential for a carryover moving above 300 million is increasing even before you start talking increased acres.
 
This demand destruction issue plus increased acres is starting to throw a very bearish perspective on beans.  Essentially, in my daily trading activity I’m getting much more focused on selling sharp rallies now than buying breaks. If the Jan contract breaks below the $8.75 level, one must anticipate active long liquidation and new selling to enter the market so be advised.
 
As for the corn market my focus is on trying to sell a bounce in the March contract between now and early Dec. Anything above $4.10 should be used to scale up sale. My focus would be to liquidate these hedges towards the end of December at the price level where the Dec 08 contract goes off the board.
 
Overall, I continue to expect a market that is range bound. This pattern I expect to persist until we have a clear confirmation of a bottom in the energy and equity markets and a clear top in the dollar. My expectation is it’s going to take longer than we are currently expecting.
 
 
If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Soybeans continue to be range bound

Nov 18, 2008
While the bean market continues to have decent daily price ranges, we are essentially trading the overall same price range we have been for some time.

It’s difficult to get the January beans above $9.20 but equally difficult getting below $8.75. The very tight trading range is developing because the fundamentals are not really clear to which direction things should go. We know that the seasonal pattern should be building for strength into December as uncertainity about the South American crop builds. 

In the export market buyers are starting to accumulate positions right now which are bullish. For example, Iran is in the market for some meal and oil which is considered positive. On the negative side, talk is starting to surface there may be a big break in meal needs after the first of the year. Poultry starts are down rather big, along with big loses in pork and beef. Essentially, some herd liquidation is going to be seen. Finally, long term everybody is concerned about big acres coming into beans both domestically and internationally.

As I see it, producers really want the bean market to move higher to price unsold inventory and get ready for next year. End users are buying hand to mouth because they simply don’t know what demand is going to do. This all suggest to me that producers must be short term in thinking. Trade the ranges and not be too greedy with their objectives.

In our brokerage accounts we have been very active in short term trading. Our objective has been to make at least 5 cents, happy at 10 cents and jump up and down at a 15 cent gain. While I know this can not go on forever, for now it’s building the accounts at a solid pace which is what I like.

So until I see the outside markets close above overhead resistance and give solid technical moving average buy sides my bias is to trade the trading range. Sell $9.16 to $9.21 and buy $8.85 to $8.75.

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Decent bounce in the grain markets Monday

Nov 18, 2008
We started the week off with a decent price bounce. Harvest is starting to wrap up and the bin doors are getting ready to shut hard. So the supply side of the equation is essentially set. Seasonally, one must be positive to the corn market but this is not normal times. The market continues to be keenly aware of the outside markets and it’s influence on “demand domestically and internationally.”  Normally, lower values would help increase usage.Times are different right now. Everybody is worried about their income and consumer demand is drying up. I have to say that this stagnate demand could last for some time.  Therefore, for now I’m a neutral to the demand bear.
Bottom line: The market is at a stalemate. Sideways rather than trending is more an expectation. The biggest risk I see for corn now is the deferred contracts trade down to the nearby contracts.
Short term bias is positive but I will be watching the March corn contract for potential catch up cash sales for end of the year selling opportunity. I would start selling the March at $4.15 and be done by $4.20 on any cash sales you want make between Dec. 15 and Jan. 5.
If you have any questions or would like to read more of my daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Final thoughts for the week

Nov 14, 2008
Currently I don’t see any bullish fundamentals strong enough to push us out of the upside but a lot of concern about crude and equities pushing to lower levels.  I continue to suggest the supply and demand fundamental for beans are about as tight as they are going to get and have the potential to get decisively worse as the year drags on. If we see lackluster demand and significant increase in global production acres, beans could become as weak as cotton!

Wheat has developed an impressive double bottom on the charts. The talk of Argentina’s crop being down has helped a lot. I have to say I really like the technical nature of the wheat chart but I can’t get excited about the fundamental make up of the market. I have suggested on my daily copy any client who has sales on the books below the July $6.05 basis should consider moving to the sidelines in hope of a seasonal bounce. If you have significantly higher trades I’m inclined to simply sit on the trades and maybe sell a deep out of money put to help insulate some of the upside risk. 

The last couple of months the hog complex, like a lot of the commodities, is trying to bounce off its lows. While I want to give a little encouragement the lows are in, for hogs I must be quick to point out that hog exports are the key to higher prices. If the global recession gets deeper, the issue is will exports be able to hold up. I’m still of the opinion that there is about a 50/50 risk we still need a strong round of hog liquidation before the lows in.

The cattle charts are a mirror of the hog charts and essentially the same forces affecting cattle as hogs and poultry. One can’t get really bullish to cattle until we have some confidence that equities and oil have bottomed. Next week, will it be a week where the market will try to confirm the low is in for cattle or do we still have a serious risk of liquidation ahead?

Of all the ag commodities I watch, the cotton market has been the one most beat up. We may have put a low in cotton but just like all the other commodities we are holding our breath and waiting for solid outside confirmation. One point I will make is that new crop cotton according to some Southern producers is approaching the “variable cost” of production if you add on any type of basis. Yes that’s right, prices are at levels where they only pay for the seed, fuel and fertilizer. The land cost, labor cost and profit is a dim memory. The issue will quickly start to develop questions like whether they will start changing their crop mix to other commodities, and simply let their cotton picker sit in the shed this year. Common sense suggests cotton is approaching a long term bottom, the problem is with all the outside financial market uncertainty we may have to wait until we confirm significantly lower planted acres before the cotton market starts to rally.

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Code Name: Volatility

Nov 12, 2008
The key word today is volatility, or movement up and down.  I realize a lot of producers are putting a lot of grain in the bin and are looking for a bottom.  Seasonally, as the bin doors shut one would think we would be getting bullish price trends. This year is a totally different mindset.  The influence of the outside markets specifically the equities, oil and the dollar are all becoming a major predictor of price activity in the beans and corn.

Today we opened lower with January beans at $8.88 and December corn at $3.63¼ on weakness in the crude and equities. Then corn, beans and wheat started to see price stability and even moved to a very nice plus level with December corn at $2.89½ and January beans up to $9.22.  This all helped to develop a daily trading range of 34 cents for beans and .2625 for corn. I have to tell you this is an impressive range but it also potentially took a lot of power away from the bulls today. I would suggest the following: Today’s rally was about some strong profit short covering and speculative bottom picking by the bulls. I fear many of the bulls bought on the break out event and are going home a loser now.  If the oil inventory numbers are bearish and we drive the crude down another 5% or so tomorrow I would not be surprised to see buy stop loss liquidation to develop early on. 

So if you are looking to be a short term buyer, I like buying December corn below $3.62 and November beans below $8.88. If the trades not good by midsession I would be defensive with no more than a 10 cent loss exposure.

Overall I would suggest sit and hold positions must be cautious in trying to get too big now until we see a solid technical confirmation of a bottom in both the grains, energy, and equities and top in the dollar. The problem is this is going to take time perhaps longer than most bulls want to wait.

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 
 

Today’s report and market reaction

Nov 10, 2008
The November USDA Supply and Demand report came out very close to expectations. Production was a little lower but exports were reduced because of concern about weak global demand. Bean carryover was left unchanged at 205 billion bushels but corn was increased 1.124 billion bushels. The commodity with the real concern will be wheat with an overall increase in domestic and global carryover. The other commodity that was hit hard today was cotton. World stocks increased from 55.45 to 57.40. 

The big impact is that the bearishness of wheat and cotton is going to force crop mix decision modifications for many Southern producers next year.  The tone I’m getting right now is with lead month cotton below 40 cents, acres are going to shift to beans.

I was a little surprised with the lack of follow through to the bean market today. We had overnight session up clear to $9.51 but then fell on confirmation of the numbers the trade wanted. You never like a positive report and bearish reaction. This could keep beans in a very choppy trading pattern over the next week. Many traders in beans will be watching crude oil and the dollar for direction.

As for corn, the carryover numbers are not moving in the direction for higher prices. Granted we are getting close to the time period when the bin doors are going to shut, but the potential of significant price recovery is difficult to predict with carryover increasing. The market is going to have to see positive signs that economic conditions are not going to decline any further and no further drop in demand before any type of sustained rally can occur.  Essentially, I’m not really that bearish to lead month corn below $3.75. The issue is how much rally can we really expect to see?

Side note: I continue to be worry about the hog and cattle sector because of potential exposure of reduce export of products. This is something we are going to have to watch very closely.

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Grain Markets continue down trend!

Nov 06, 2008
The ag commodities broke from the opening bell. While corn closed under pressure, there was some relief in beans. The reason I would cite for the sharp correction are:
  1. The continued decline in the equities. With expectation of further bad economic data ahead of us, the investors are getting very nervous as to who in the new administration is going to turn things around. I would not be surprised if the new administration tries to do something very dramatic in the first two weeks of his term. Essentially, outgoing administration is now closing up shop causing the equities to question how bad things will get between now and the first of the year when any new policies can really be implemented.
  2. The second variable is related to the global economic health expectation. The oil markets broke again hard today and weekly oil statistics were neutral at best. Concern continues to be that demand is imploding but production of supply will not decline as fast as we need to keep from building up domestic and global supplies. As a side note: I guess I don’t have to tell you that the seasonal low for gasoline is normally the December time period. If I were you, I would be working as hard as possible to forward buy inventory product in this time period for your spring needs.
  3. Final factor affecting producers is harvest is wrapping up and most of the elevators are full. The product is simply not moving fast through the system which is making the last of inventory that must be sold putting a lot of pressure on prices.
While the corn and bean market did break today, I like the way corn and beans held their ground in light of the bearish outside markets. If we get bearish economic data and a bullish reaction in the equities we are set up to bounce back in corn and beans on a neutral to positive November USDA Supply and Demand report on Monday. I would encourage a cautious buying strategy of long calls or covered futures positions in the December corn below $3.76 and January beans below $8.80.
If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.

So much for the honeymoon!

Nov 05, 2008
So much for an Obama honeymoon for the financials and commodities, the stock market was off 300 plus, oil was down $5.18. This forced selling pressure into the commodity sector from the opening bell. Soybeans closed 54 lower and corn 213/4. While not at the old lows, it is very near.

The issue now at hand is whether this simply a retest of the old lows or a resumptions of a much more bearish situation. My bias continues to be that some corn harvest pressure could still persist for another 2 weeks but much of the bean selling pressure due to harvest is done. I really want to argue that December corn below $3.90 is at value and Novembers beans below $8.75 is at value as well.

The only “if” comment I will leave you with is now that the elections are done, the media will focus more aggressively on the economy. They could potentially over blow the bearish numbers that are due to be coming out over the next few months. This could in affect cast a very bearish shadow over the corn, beans and wheat market in regard to the domestic and global demand outlook. 

In summary: I have to suggest all feed buyers should be getting very aggressive with a scale down buying program. I would move back to 100% purchased position when we see a solid technical close above the long term moving averages and overhead resistance.

Bottom line: The only reason the ag commodities will make new lows is if the stocks and oil take a big break from the current levels.

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 

Election week and the grain markets!

Nov 03, 2008
Well it’s finally here—election week!  I don’t know about you but I will be glad when all the ads are over! 

As for the influence on the market, I assume everybody’s going to be cautious. This plus a solid week of harvest should keep the market sideways-to-lower early this week. I do sense there is a lot of interest in buying corn under the market. However, if you are going to try to buy hard before the November USDA Supply and Demand report, I would suggest buying in the money lead month calls rather than buying futures.
Right now there are several players convinced that corn yields are coming and some are convinced they are going up. Obviously some body is going to be really disappointed. My suggestion is don’t set yourself up to fail.
So where do I stand? I believe the low is very close if not in, and the market is trying to confirm a trading bottom. As for upside potential, over the next six months I believe we are going to be disappointed.  I would not be surprised to see a lot of choppy price action with false breakouts both up and down.  The real potential for me is 2009 and out.
 
T
he big issue for me is over the next six months we still could have a major economic correction as the negative factors hit main street. Long term I believe demand will be inelastic for corn which implies limited loss of usage. At the same time I “fear” a modest reduction in acres and a big unknown about yield as producers adjust their fertilization patterns. This suggests that the potential grows big time for a major reduction in corn carryover as we move into late 2010. 
Bottom line: While last summer was the multiple year grain selling time period. The potential for a multiple year feed buying play is developing. I just don’t now if it’s now or next fall.  What do you think?

If you want to go over details or would like to read more daily recommendations regarding reownership or marketing strategies, email me at utterback@utterbackmarketing.com or laura@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. 2008.
 
 
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