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RSS By: Bob Utterback, Farm Journal

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

Are we now going lower in corn?

Sep 02, 2008
The market has come back from the holiday ready to feed on the bull. It’s done a good job today in all the grains of putting the bull back on the defensive. Sharply lower crude oil values have helped put pressure on the bean complex. We were off more than 65 cents today which also put pressure on the corn complex which was almost down limit. 
 
So the question has to be asked: Is this bearishness justified, and are we now going lower? It’s a simple question but very difficult to answer in a black or white. My first shot at the question is to say I’m a corn bull after the combines start to run and get increasing more bullish as we move into next year and the market has to buy acres due to higher input cost. If I had really deep pockets right now I would start buying December 2009 at $6.05 and buy a unit every 5 cents lower, please note this is what we will be doing on the internet copy.
 
The problem I have with being a bull today is I can’t prove the corn crop is not out there. With crude oil down and rain coming, the bears are pushing the bulls out. The critical issue now becomes will we see a decisive move to the sidelines of the large speculators. I believe they have enough cash flow to survive the market and are committed to long term ownership. Therefore, I believe they will be scale down buyers rather than liquidators of positions. This essentially takes some of the steam out of the downside argument. 
 
Summary: Near term corn is going to be under pressure. The lowest price action could easily be seen in the month of September. If you have to sell off the combine you should not allow December 2008 corn to move below $5.50.
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.


The recommendations and opinions contained herein are based upon information from sources believed to be reliable. However, that information may be incomplete and unverified. There are numerous factors that can affect the markets, which cannot be fully accounted for in the preparation of these recommendations. Those following these recommendations do so at their own risk. The firm and/or customers of the firm may take a position that may not be consistent with the recommendations herein. Any recommendation does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any commodity interest. Commodity trading involves risks, and you should fully understand those risks before trading.
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COMMENTS (1 Comments)

CJ Oakwood
Bob,
The crop is not out there.....when the trade figures this out we will see a big push up in corn prices. As for the beans....pod fill???? I have pods on my beans, theyare as flat as "Twiggy"! We are dry..dry..dry in east Central Illinois. I am going out on a limb...corn under 5.25 only buys 82M acres in 2009. Hopefully, McCain will do a complete house cleaning at USDA.....
7:02 AM Sep 3rd
 
 
 
 
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