Jul 30, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin


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.

Fear of a "global recession" turning into a "global depression"

Dec 02, 2008
I believe we are now in the final month of one of the most violent years on record for the commodities. I know a lot of those with unpriced grain want a sharp price recovery. I don’t want to cast a negative shadow over the holiday season, but I have to say we must be realistic. The market is at these lows for a reason--the fear of a “global recession” turning into a “global depression!” In my opinion it will take more time than many unpriced producers want to see.

(1) As I’ve suggested for several weeks now, a change in the bear trend for equities, energy, gold and a bull trend in the U.S. dollar must be reversed before any sustained rally in the ag commodities can be maintained. The earliest I would expect this to be technically confirmed would be late January to early February.

(2) In regard to the grains and oilseeds, I believe we must see solid confirmation of domestic usage and export demand not dropping. Essentially, it’s important that we prove to the trade that a global demand contraction is not going to occur. I would suggest this confirmation will take place in February or March.

(3) Supply. We are going to be talking a lot about crop mix and the amount of planted acres for next year. Right now my bias is less corn and more bean acres. While this would generally be favorable long-term to corn and bearish to beans, it will not be enough of a reason for corn to rally. I believe these factors will only come into play next spring, and then they will only lead to strength if we can combine them with some sort of weather concern.

So where does this leave us? I’m concerned that we have the potential of end of year weakness. It will be more about cleaning up the books before the end of the year. If the corn and bean markets remain at the bottom of the trading range and anything happens in the outside markets, we could see one final panic break to the downside. This implies, if you have been trying to bottom pick the market, you really need to keep an eye on risk management to the downside during this time period.

Bottom Line: We need to first find and confirm the bottom before we talk about how far the market can recover.

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.
 
 
Log In or Sign Up to comment

COMMENTS (3 Comments)

Anonymous
Yes anonymous 2 you're right, name-calling doesn't accomplish much but I'm alittle tired of all the analysts and experts who have been trying to pick the bottom of these markets. Bottomline is no one knows where that is. I sold most of the 07 crop for a good price but no I didn't sell any 08 because of the so-called experts' pie-in-the-sky predictions back in June. We don't even have our corn crop out yet, barring a miracle in the coming weeks, we may be taking it out come spring if it's still standing. Not sure it matters in the long run as we'll probably be swallowed up in time by one of the big-grain farmers who up until a couple of years ago survived because of the government checks. Call it whining if you want but it's a fact.
7:31 AM Dec 3rd
 
Anonymous 2
anon amouse must have the same yearend outlook that scrooge had, with an attitude like that. He must not have sold any 7.00 corn, is mad at himself for not doing so and takes it out Bob. Also there is no need for name calling, just look in the mirror.
9:36 PM Dec 2nd
 
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions