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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.

Old Crop Beans Take the Lead

Jun 11, 2009
The bears could not keep the corn market down for more than one day. In fact, the bean market has erased and made new contract highs. I remember a saying that if the market closes near its high on Friday, you can be bearish for Monday! Old crop beans are leading the charge, as one would expect now that we know that carryover is at 110 and more than likely tighter, which forces the market to start rationing usage until new crop comes on board. Essentially, that’s three months away. The only beans I’m worried about are the South American beans that are being held by farmers. One would think if they are going to sell they would do it by mid-August.

As for corn, the market has recovered a lot of yesterday’s losses but has not been able to make new highs. The corn market seems to want to talk about how bullish things could be, but no one is really excited about buying it at the current values. It seems we will need two more events to occur before we get that final price assault. First, we have to keep pressure on the dollar. Second, we must confirm planted acres down in the end-of-month acreage report. My suggestion is that anybody needing to sell inventory or looking to protect prices for the expected seasonal decline from July into harvest should be looking hard at pricing after the acreage report but before the July USDA Supply and Demand report.
A special note for hog producers: It does not look good. I see two troubling factors for your future. The potential for feed prices to rally from this fall to next spring is quite high. While it will not be as bad as 2008, it will seem like it. The second factor which could be even more bearish is if the swine flu (H1N1) pandemic comes back like it did in the 1919 outbreak. If we have a rash of outbreaks in the Midwest this fall, I would not be surprised to see export buyers of pork product extend their ban on U.S. pork products. So with weak demand and higher feed prices, there is only one thing we will see in the hog industry: herd liquidation. Anybody remember the fall of 1998?

If you need any help in implementing a speculative or hedging strategy, give us a call at 1-800-832-1488 or email me at utterback@utterbackmarketing.com or laura@utterbackmarketing.com. Tomorrow we will talk a little about the bonds, gold and crude oil.

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. 2009.
 
 
 
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COMMENTS (3 Comments)

Anonymous
basis great in area beans +20, corn +1 july problem is 30% of my corn acres now going to beans and only have 40 acres of beans planted, 2+ inches of rain will be lucky to be done with beans before wheat harvest, also need to sidedress all planted corn acres that survive. going to be a very busy time ahead some areas just north of me 2 days total field work all year, they are already trying to differ payments on equip purchased last year.
11:23 PM Jun 11th
 
Anonymous
So far in my area Ive lost .25 cents per bushel in old crop soybeans.. Basis going krazy from .55cents to $1.10 in two days. Lost in price this week.
10:31 PM Jun 11th
 
 
 
 
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