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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.

Corn has now moved back to technical support!

Jul 08, 2008
Today’s full fledge long liquidation break has now taken the market back to some important technical support levels. First, for December corn, $7 is actually 50% retracement of the total June rally, today’s low of $7.02 is close enough for us. Second, the market did however close the June $7.05 to $7.15 gap. With the double top formation, this does give some weight to the bears in that a major high has been made.
What’s next? Friday we have a USDA Supply/Demand report coming out. Expectations are for some acreage adjustments but the big numbers will be in the August report. Overall, I have to believe acres will be reduced but not as much as the bulls want. We will not get the real numbers until the final January report.
So what’s pushing the bulls so hard today? I believe it’s a growing fear that Congress is looking for a scapegoat and it’s called the speculators or more specifically the ETF’s. This issue started to surface a few weeks ago, many thought it was going to be put to bed until after the elections. It however appears Congress wants to get something done faster. While short term it could be bearish, it could actually work to the markets advantage in getting some excess baggage off before the fall time period. As for blocking money from coming into commodities, I believe if there is money to be made the big money will find ways around any government restrictions.
In summary, December corn has achieved my downside targets much quicker than I would have liked. I really wanted to see these levels closer to the end of the month. Since it’s come early, one needs to be careful in how you buy. Right now I would focus on put selling or vertical call strategies rather than net long positions. Until we get to the end of the month I’m not really excited about going net long in a big way for a sit and hold position.
Give us a call 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.

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)

Nuffield
I'd be surprised if there was any so called restrictions were to be placed on any speculation in commodity markets. Merely theatrics. After all the US government is keen to see inflation exported. Why else would you drop interest rates when they should be raising them, causing the USD to capitulat (and the downtrend is far from over). The Congress wants answers on inflation. How about telling them to go see Bernanke and the Fed?

Onwards and upwards once a technical bottom is reached ...
5:50 AM Jul 9th
 
 
 
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