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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.

Grain market recovers some of the gains from last week

Dec 29, 2008
All grains and oil seeds started the market out strong on follow through strength of last week’s short week. However as we approached the later part of the day, you could sense the market was losing it’s resolve and red ink started to appear. 

I’ve been wondering if producers had forgotten about the market but I believe we are starting to see a lot of producers show up. With November 2009 beans trading close to $10 futures and December 2009 corn above $4.60, interest in getting a floor under next year’s production is starting to show up.

I have to admit to all of you out there I’ve been out of rhythm with this market for the last few days.  There are two things I have to say about this market. First, generally when the market does something in a time period you don’t expect, it’s more than likely stealing from future prices.  Bottom line: I fear 2009 could be a really messed up year in regards of seasonal trends. The fundamentals are going to be way behind the curve in explaining price action.  This implies to me the second observation. When everybody is confused, that’s the time to go back to the basics and ask yourself “what do you want from the market?”

I have to suggest that beans are long term a greater risk than corn. I simply don’t see the logic of why we need beans above $10 this fall. Equally, I understand I’m fighting an uptrend. If there was ever a time to be buying limited risk positions to get a floor in the market now would be that time. In my daily copy I’m suggesting a scale up selling program via the use of puts to get floors under the market.

The big question now is how bad has demand been hurt? How fast will it come back and finally what will producers do on crop mix decisions? All of these factors plus the annual weather concerns are shaping up to make 2009 a very nervous and unpredictable year. That’s why we are suggesting the use of options could help put a floor under the market, help you sleep at night and keep your cash flow obligation to a manageable level.

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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COMMENTS (1 Comments)

Anonymous
I can kinda understand your thoughts on Nov beans at 10 dollars,,,,,but,,out here in my part of the cornbelt beans are running at 1.20 an more UNDER Nov futures. That hurts,,makes the Bean Buyer (Elevator-Processor-Exporter) look like crooks to me.
9:07 AM Dec 30th
 
 
 
 
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