Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
Grain stocks not giving out favors today
Sep 30, 2008
The grain stocks report did the corn and bean markets no favors today. While project (A) saw a bounce, the market essentially opened lower on the bearish stock numbers and headed lower. The bear now has the bull in a full fledge stampede for the exits. Concern that demand is going to continue to contract on a global basis has all commodities in a correction mode.
As I suggested yesterday the ability to break strong technical base of support in all the commodities has the market in fear of a full blown correction to where we started out last fall. Today’s corn close below $5.05 must be respected with the next level of support at $4.80. If this level is broken the margin calls for the longs will force the issue for the bulls to get out which could force the final liquidation phase.
So the question that everybody is asking is what to do with unpriced inventory. I have to suggest you focus some level of disaster price protection. Why not store your corn but look at some type of 70 cent to 80 cent vertical put strategy in the March contract for corn and focus on a $1.50 type vertical in beans and wheat. The bottom line is to put a limit on the bleed and allow yourself time for the market to stabilize.
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.