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February 2009 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.

On my way to Commodity Classic!

Feb 25, 2009
I’m on my way to the Commodity Classic and hope to see you there. My expectations for this week—I’m going to see a lot of concerned individuals. It’s growing very apparent that producers are sitting on a lot of inventory and are hoping for a rally.

Yesterday corn broke back to support and held while beans were quiet. Today the market was down on the open for both and up strong into the close. I would not be surprised to see an evening up by the trade as we move into March’s USDA Supply and Demand report. I still believe there are still a lot of problems in regards to the banks that must still be resolved before we see a solid bottom to the outside markets.

So what does it mean to producers? I continue to want to propose that corn could have some price recovery because of acreage reduction and spring planting delay. I want to cautiously buy December corn and be satisfied with 30-cent rally. The real issue becomes when to price old and new crop corn. First, I must suggest on old crop corn you need to be getting the basis locked up. I really fear a lot of old crop corn is being held for a summer rally. Second in regards to new crop corn we need to be honest. The potential of December corn getting back above $4.50 is very low and will only happen if we see some type of major weather event. Therefore, you need to be selling inventory based upon time and price. I know you are not going to like it but incremental selling in early April and through June is recommend.

In regards to beans I’m hearing some very interesting developments. When clients look at corn vs. beans in regards to crop insurance they are seeing that they can make money with beans but they still have to have a serious flat price move to make money in corn.

If this pattern persists, we could confirm more than expected bean acres in this year simply due to the financial uncertainty everybody is experiencing. Therefore, the tone of the bean market I believe has limited upside rally. The only thing left right now is if the Argentina’s crop is confirmed smaller than anticipated along with a dock strike.  I would be actively using any type of rally say 20 to 30 cents to get both old and new crop sales cleaned up! 

Bottom line: Now is not a time to take major risk with operation. I urge you to cover your costs and get through this year, granted we may not make a lot but we at least keep our books in the black unlike many industries right now that are bleeding a lot of red ink!

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. 2009.
 

Corn market bounced on short covering!

Feb 23, 2009
Today the corn market is bouncing on short covering due to an oversold condition.  I would have preferred a little more weakness early this week then we would be able to support strength into the end of the week. Right now the market really wants to start moving higher. The problem is the negative outside markets and the big supplies being held by producers.
Things to do:
  1. Get basis locked up now for any summer or off-the-combine cash sales.
  2. Start scale down buying of speculative buying program.
Please remember, I’m not really excited the level of upside price potential but I do suggest it’s time to stop being negative and allow ourselves the opportunity to participate in a modest upside price bounce due to strong farmer holding and some potential spring delayed planting weather scare.

Special note: I will be at the Corn Commodity classic at the Farm Journal Booth. Come on by and say hello. We will be taping a segment for U.S. Farm Report.  As you know, come early because seats go fast!

Starting next week it will be my intent is to start talking more about the outside markets, specifically gold and bonds. Long term, I believe there is the potential for major speculative opportunities ahead!

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. 2009.
 
 

Wow, what a week!

Feb 20, 2009
 The Dow has now taken out last fall's lows. Consumers are losing confidence in the banks and stocks! Concern is now growing that investors are going to pull their money out in mass which could really temporarily crash the market. Early next week will be a very nervous and revealing week. Talk of 6,500 to 6,000 is now being seen. Blue chip stocks are now seeing lows not seen since the early 90’s. Panic is in the air, which means opportunities are getting ripe for the investor.
 
The gold market broke through $1,000 but could not hold and everyone seems to want to buy breaks. Normally, I get worried when this happens but I have to say $1200 to $1500 gold seems a solid upside risk. This week I bought June gold around $980 level and sold June $1,200 call for $30 or $3,000 premium. If you are interested an inflation hedge, I believe gold is the commodity to buy on corrections. I however strongly urge you to have some measure of protection. These markets are getting violent!
 
The oil market after yesterday’s bounce up corrected. Everybody wants to be a buyer because of a drawdown in inventory but equally everyone is worried about the future demand outlook. I view it as a long term buy, but it may take to summer to get a solid confirmation of a bottom. Again, buy futures with tight stops and then sell out of money calls to help insulate position is a solid risk way to move at this time.
 
All of this volatility in the outside markets weighed heavily on corn and beans early in the session today even with the strong export numbers we saw this week. At one time we had beans down over 26 cents and corn down around 11.5 cents. Corn was the commodity that started coming back and eventually closing only down 1.5 cents.
 
It appears corn is finding value in the lead month around $3.50 level. The basis for old crop corn is going premium in many areas because of very slow farmer movement. We strongly urge all clients with old crop corn and beans to be sold to be taking advantage of these very tight basis levels to lock it up for spring sales. We are becoming increasingly concerned that there is much more old corn and beans that must be priced than is healthy for the market. It appears a lot of producers are holding inventory and holding for a bounce to help pay the bills.

Looking to next week I will be looking to be a buyer of corn early week in the December corn below $3.85 to $3.75 range. If you have sold futures I would focus on trying to sell the out of money December puts. We will be talking about this strategy in our online Utterback marketing service.

Finally, I will be at the commodity classic next week. I will be at the farm journal booth and taping Ag. Day. If you are coming down, I hope to see you there.

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. 2009.
 
 
 

What I picked up from the road!

Feb 18, 2009
Very slow price action today after yesterday’s hard breaks. Everyone seems to be holding their breath now to see if the Dow can hold the November lows. If they are broken on good volume one must be prepared for a general new round of long liquidation and new selling in almost all markets.  I would say right now it’s a solid flip of the coin and that’s scaring everyone.

What did I pick up from the road? As you know I’ve been speaking to a lot of producers across the Midwest over the last month or so. Here are some of my observations:
1. Producers still have a sizeable amount of old corn and beans in the bins to price.

2. Producers are not in the mood to dump at current prices.

3. Cash flow is not really that tight right now and producers are going to be able to hold unpriced inventory into summer.


4. A very low percent of 2009 corn and beans have been priced.  A few clients have priced more than 25% of inventory but the numbers are very small.


5. The on-farm cost of production for corn and beans including crop insurance, storage, marketing cost and basis is significantly above current price levels.


6. If producers can get a summer rally, they appear to be inclined to store inventory unpriced all the way into spring of 2010 in the hope of demand recovery and inflationary pressure.


7. While the producers’ marketing plan is basically bullish, their overall opinion about the economy and subsequently the future is dismal at best. This is where the inconsistency in their game plan develops. You can’t be bullish about commodity values but believe the economy is getting weaker!
Bottom line: Producers have now gone into the hope phase. Hope there will be a weather event, hope that inflation will lift speculator excitement about the market, hope….

Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.

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. 2009.
 
 

Concerns for producer marketing

Feb 13, 2009
It was a pleasure seeing a lot of producers down at the National Farm Machinery show this week in Louisville, Ky. I was a little concerned about prices before I went to the meeting and now I’m very concerned. Producers are sitting on more corn and beans than I would like to see at this time of year. Second, they are inclined to hold until summer for a weather scare market. Little to any new crop inventory has been sold because their costs are up and they want prices well above current trading prices. We are doing this in an environment where the outside market influences are getting more bearish and demand appears for both corn and beans to be getting weaker.

Coming back from the meeting, I have to suggest that many are now getting into a "hope" phase of marketing. Hoping that holding inventory is not wrong, hoping that a weather event will occur but not in our backyard to rally prices, hoping the government programs cause inflation for our products but not for what we are going to buy!

Starting next week you are going to start hearing a lot more comments about why as a producer you need to be watching the gold, energy and interest rate markets more aggressively in developing an overall marketing program to protect profits.

In a nut shell, we are going to have to have strategies in place to protect against inflation in fuel prices and interest rates along with the potential of price declines in selling price. Are you ready?

Yes I’m very nervous about the future but fortunately we have time to prepare ourselves to take advantages of the opportunities ahead rather than sitting back and hoping the government going to bail us out! If you are interested, e-mail Laura for more info laura@utterbackmarketing.com.
Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.

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. 2009.
 
 
 

Bob’s thoughts from the Louisville Farm Show

Feb 12, 2009
Hello from the National Farm Machinery Show in Louisville, Ky. I spoke to a group of about 450 yesterday afternoon (sponsored by Farm Journal and SFP). I polled the audience before starting my presentation and got the strong impression that more than 30% of old and new crop beans still needs to be sold by farmers for inventory stored on farm. As for selling new crop, I asked for a show of hands of those that had sold more than 20% of inventory for both corn and beans. As I expected, the number was low--only three people. As for the cost of production, there was a common agreement that they will need more than $5 for corn and $11.25 for beans to pay for all costs, including fertilizer, cash rent, crop insurance, any marketing related expenses and a 10 percent profit objective.
 
When I said the old crop bean high was more than likely in, you could hear a collective sigh of frustration. They knew they had walked away from some very high values last year. If you have been reading my copy lately, you know I strongly believe we are in the best time for strong price action. I ask you, if the bean crop cannot rally on USDA’s confirmation that the Argentina crop has been potentially reduced over 210 million bushels, what do you want?
 
Another piece of information I picked up was a confirmation of what I’ve been sensing in my discussions with farmers in the southern part of the U.S.--there could be a big shift of cotton acres to beans. I’m not ready to go above the 4.5 to 5 million acre levels, but at this time I fear that if there is going to be a surprise in the market, it’s going to be more bean acres. This continues to put pressure on the new crop bean prices.
 
I was impressed that over 60 people out of about 450 indicated they plan to reduce corn acres. This, plus what I’m picking up from the seed corn people, suggests corn acres are contracting.
 
So where does this leave my corn buying market plan? As many know, I want to develop a seasonal corn buying plan for February to May. Today’s sell-off is getting the market close to levels where I’m going to suggest speculative players and feed hedgers start buying. If you’re interested in the specific target prices and tools I’m planning to recommend, call us at 1-800-832-1488.
 
I’ll be speaking again tomorrow [10:00 a.m.] in the South Wing. Stop by and say “Hello” if you are in the area.
Final comment: We are now in the crop insurance season. We realize it’s a big financial expense, but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward. By having the insurance in place and then selling the cash, the potential for returns will be huge. If you have any questions about crop insurance, give Rowland a call here at UMS at 1-800-832-1488.
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. 2009.

Its report day and my opinions!

Feb 10, 2009
It’s report day! One should always be prepared for surprises and today was no different.

The big one for me was the USDA did absolutely nothing to the corn numbers and left everything unchanged. This should have been considered a bullish victory for the market. Pre-open comments were for a higher open. The surprise was the corn market has been down for most of the day and in some cases sharply lower. December corn at $4.20 is too low to really be comfortable selling but equally too high to be comfortable buying.

As I will be telling everybody at the National Farm Machinery show this week in Louisville, Ky., I want to be a modest seasonal buyer of December corn below $4.05 but equally a strong producer seller above $4.50.  Please note: Delayed planting and inflationary concerns are the bullish factors for corn while the concern about carryover increasing will be the big bearish factor. My concern is as this economy continues to slip and producers hold a lot of product into summer, it could put a lot of price pressure on the downside into fall if no weather event occurs.


As for beans, the USDA reduced the crop just a little as expected to the 205 million. The big reduction was in the world stocks because of the drop in production in Argentina.  It’s now estimated Argentina crop will be reduced 36.75 million metric tons or about 209.5 million bushel or our entire bean carryover. The only thing that’s keeping beans in check is global stocks, still reasonably adequate at 50 million metric tons which leaves stocks to use ratio still at adequate levels of 18%.

With the potential of domestic production acres increasing over 5 million acres, we could easily see global supplies increase in light of the current global slow down pattern in demand. My impression of beans is unchanged and we are currently in the best time period for higher prices. The only thing I see that could push prices up further is if we would have some type of dock strike down in Argentina some time this spring. Both the government and producers are being hurt by lower production and lower prices, they may seem like they are fighting with each other, but the end result is to drive up prices. I must strongly point out this is only a temporary situation. While prices in the old crop could be driven up short term, inventory still has to eventually come into the market. I can not urge strongly enough all producers should be using any type of price bounce to get old and new crop inventory priced.


Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.

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. 2009.
 
 

My thoughts prior to tomorrow’s report.

Feb 09, 2009

It’s the day before the Supply/Demand report and the market is rallying rather hard today. It appears that the trade is more worried about the government stimulus program than increased carryover. Tomorrow’s report will be looking to balance increasing domestic supplies against the prospect of reduced global supplies, specifically Argentina. It seems to me everybody is beating the drum really hard to keep prices firm.  My expectation coming out of the report is it will not be a dominant bullish or bearish report but a little something for both the bull and bear to chew on. It’s too early to talk about weather scare, so I question what’s going to give this market direction over the next few weeks. My expectation before the report is it will be difficult for Dec corn to get back below $4 but equally very difficult to get back above $4.50. We are going to have see confirmation of weather before the market breaks out of either trading range.
 
As for soybeans, everybody with old crop beans to sell is hoping something positive comes out of tomorrow’s report to ignite the beans. Going in I’m not looking for much of a change. I assume everybody will be looking at the global numbers to see if things are getting much tighter. Looking over the next few weeks the only thing that I believe really can get things improving is if weather conditions gets worse down south. Second, if some type of dock strike occurs and temporarily drives prices higher. Granted the concern about inflation could keep old crop firm well into summer but our concerns are still quite high that a big acreage increase and slower global demand will keep the new crop prices on the defensive.  A retest of the high $9’s we continue to believe is a low rather than a high probability.
 
Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.
 
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. 2009.
 

Weather concerns continue

Feb 06, 2009
Beans and corn closed the week strong on continued concerns about Argentina’s weather situation and the expected big government stimulus bill. It appears that Monday is going to have a lot factors which could be bullish, including concern that hot and dry conditions could continue for the next two weeks in South America. Since much of their bean crop is equal to the first week of August for us, we all know rain or heat at this time can have a big yield impact. Additionally, going into the close on Friday the expectation is we will have a stimulus bill confirmed by Monday which is generally considered inflationary. Then, on Tuesday, we get a supply and demand report. Our expectation going in is corn carryover may increase while the bean numbers will remain stable. There could be some adjustment in the global wheat supplies due to China and Argentina weather problems. 

So the issue will be has the worst been seen (the labor statistics on Friday and the big carryover numbers in the Tuesday’s report). Essentially, expectation seems to be growing that the Chinese are buying now as suggested by the increase in the copper prices and the ocean freight rate increase. This is motivating the funds to get long.  Essentially, we are going to test where the global economies can be uprighted strictly by government spending.

Please note: I have been wanting to buy December corn below $4. I would suggest December corn at $4.20 is in no man’s land. It’s not high enough to get excited about selling but not low enough to get excited about buying.  I still want to be a buyer of corn below $4.05 after next week’s report but before the end of the month.

As for wheat, I would be using any strong rallies to get caught up on harvest related sales as well as focusing on selling price recovery above $9.60 to $10 in November beans to get a strong part of the 2009 bean crop sold.

Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.

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. 2009.
 
 

Grains bounce on global weather concerns

Feb 05, 2009
Markets bounced on continued concern regarding Argentina’s weather and positive exports. Soybeans moved up as much as 30 cents today and corn was close to 10 cents higher on lingering concerns about how much the crop will be reduced in Argentina due to dry weather. China is also getting attention as its drought extends in primary wheat production areas. It should however be noted much of this region is irrigated but still yield reduction is expected. At the same time, corn exports bounce back nicely today giving hope that while we are still well below the historical pace we will still meet USDA expectations.

Next week’s USDA Supply and Demand report is shaping up to be very interesting and potentially very volatile for all ag markets. Our expectation going in is corn carryover will be increased while global supplies of beans and wheat could contract a little. I would not be surprised to see a bearish report in corn. The issue is how negative can we take it down. I’ve been talking a lot about getting in position for a seasonal rally in corn on my internet daily comments.  I’m still of the opinion that we are nearing a time period to buy. The issue is at what price will it be safe.

The big positive is lack of farmer selling due to low price and delayed spring plantings due to cold and wet conditions. The bad news is we have plenty of grain in the bins and world demand is continuing to contract. End result: For prices to move as high as producers want to cover this year’s higher costs, a significant weather event must be confirmed.

Looking down the road to summer/fall time period, I see a lot of red flags developing. The biggest one will be lack luster consumer demand will send end users into a hand to mouth buying strategy. At the same time, a lot of old inventory will still be around and be forced to move into the marketing channels before new crop comes on board. Without some significant weather pressure, both beans and corn will have the potential for significant downside risk from mid-June to Sept. 

So for now we want to look at some strong speculative buying strategies in February but by early June we want to be aggressively short into the fall time period for corn, beans, and wheat. For details on our specific prices and strategies see our web site at www.utterbackmarketing.com.

Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.

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. 2009.
 
 
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