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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.

Scratching My Head At The Quarterly Stocks Report

Sep 30, 2009
Today’s stocks report (what’s out in the country) was considered bearish to wheat and beans and positive to corn. The market opened lower across the board and by mid-session corn and beans were higher.

Early bean yields continue to come in strong while the impact of frost in the northern Corn Belt is felt to be limited in impact as of this time. So with all the beans and corn coming in why is the market not anticipating the inventory and moving lower? This is the question the bears are asking right now. 

I have to say I’ve been scratching my head as well. The only answer I’m getting is in absence of harvest the market is looking for signals from outside markets. Today the oil market was higher and the dollar was lower. This continues to give an underlying strong support to all commodities. 

Specifically, the fear of continued increase inflation due to the current administration’s aggressive spending habits is motivating private equity money to continue to be a strong buyer of things which includes corn and beans!

As of today (and you know things can change quickly) the attitude seems to be developing that everybody wants to buy corn very aggressively around the recent lows of the $3.02. Even with a potential carryover of 1.7 billion bushels and USDA already pushed demand up 350,000 million bushels the feeling is inflation is going to lift this market.  

So the battle lines are being drawn between the bull (inflation) and the bear (supply and harvest pressure). I have to suggest that all sellers remain short and wait for the end of October to early November to roll hedges forward to capture carry. As for defending upside risk exposure we still are going to be strong seller of puts. As for speculative buying we continue to suggest buying December corn below $3.05 in a scale down buying strategy. As for beans we are reluctant to set a price and we are more looking at the time of late October before buying. In regards to wheat today’s report did us no favors. We are going to hold onto hedges with no plans of speculative buying in the immediate future. In outside markets we have taken profits on natural gas positions and waiting for a correction into October. In regards to bond positions we suggest selling the March 2010 at 118 or better.

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

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 (26 Comments)

Anonymous
Havent heard of too many areas that are going to collect on their federal crop insurance for corn or soybeans. Some 160-170 million acres insured with no claims due to super monster crops, like market says. At some 20-30-40-50 dollars per acre. Yes I think they could share a little bit but dont hold your breath. Its a super crop that so, so, big but magically will not be big enough to trigger any ldp payments, or any revenue policies.
12:55 PM Oct 4th
 
Anonymous
The way things are working out it might be best if the USDA and traders run both beans and corn into the ground. 7 dollar beans and 2 dollar corn so we get our revenue lose payment from crop insurance and then in Jan and Feb when they figure out estimated bushels and actual bushels are two different things the traders can run the market back up.
7:36 PM Oct 2nd
 
 
 
 
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