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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.

Market continues to work higher!

May 12, 2010
The neutral to bearish USDA Supply and Demand report is now behind us. While some corn needs to be planted, overall the crop is off to a great start. The market continues to work higher, why?  Chinese purchases of corn have exceeded expectation. They bought again last night and no one really knows how much more they are going to take. This uneasiness is keeping the bulls in charge of the market right now. We are also testing some critical overhead resistance levels. If the market breaks December corn above $3.96 we would assume some sell stops would be hit. The next big levels are $4.05 and the final level would be $4.12. While some speculative buying is coming in I believe the real reason for the rally is simply short covering. Once its over, the bulls are going to have to have solid proof of continued strong Chinese buying or some major weather scare or we are going to trap the bulls right at the high.
 
Special note for those not watching the markets: If you can keep your cost around the $3.50 level and production around 187 bu. per acre, the July 2012 corn is posting around a $150 return above all cost now that it’s moved to $4.40. Even with all the talk about inflation one has to think this is a solid price level to start looking at selling. We will be looking hard at selling this and higher level in our electronic copy.
 
In regards to beans it has seen a lot of volatility today. It was higher on the open in unison with the corn and then started to break. It looks like a classic bear trap, stops get hit  every one gets excited, the market gets higher and then drops. Remember, the supply/demand report suggests domestic and global stocks are going to increase in 2010. Granted there may be some difficulty being short in August if we have a dry weather event but overall if the acres get planted we believe the trend will long term be lower.
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. 2010.
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COMMENTS (44 Comments)

Amateur
2:31 Stopped trading when fund money not supply and demand controls prices, this was mid 2009. I do miss trading corn and still watch the reports. Went back to stock trading for a living.
2:49 PM May 17th
 
Anonymous
SO SMART,BUT I BET U GOT NO MONEY EITHER......HAHA
1:31 PM May 17th
 
 
 
 
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