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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.

Roller Coaster in corn!

Jul 24, 2008
Everyone is going on vacation now with their kids and many are going to the amusement parks to ride the roller coaster. Anybody in the bean and corn market did not have to leave home all we had to do was watch the market today. The gap lower opening could have been the signal for the final margin call liquidation cycle. Since we are nearing the end of the month and some very strong 18 to 21 day counts down off the June highs, one has to assume the bears are getting ready to bank some profits and move to the sidelines.
 
While it’s not an absolute rule, I’ve seen many times when the market has these types of severe unexpected breaks, the bull holds off through the correction on the argument it  just can go lower. Once the market bounces (as we anticipate short term) the trader is relieved and believes he or she has survived the correction. Then after the initial 3- to 5-day profit taking bounce the market starts to weaken and test or even make new lows. This is where the bulls psychological and financial position is at its weakest. This is essentially what creates the double bottom pattern in charts and set’s the stage for a long price recovery.
 
Please note that right now I would suggest the corn market is in a more likely stage to create a double bottom than beans. The beans have been much stronger because the stocks are tighter and the bean crop is more marginal. 

 
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
 
The recommendations and opinions contained herein are based upon information from sources believed to be reliable. However, that information may be incomplete and unverified. There are numerous factors that can affect the markets, which cannot be fully accounted for in the preparation of these recommendations. Those following these recommendations do so at their own risk. The firm and/or customers of the firm may take a position that may not be consistent with the recommendations herein. Any recommendation does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any commodity interest. Commodity trading involves risks, and you should fully understand those risks before trading. 
 
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