Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
Soybeans in full retreat!
Sep 03, 2008
The soybean market is now in full retreat on the basic belief that the September heat is going to allow the late-planted beans to mature and make a good crop.
With rains coming up from the hurricane intended to hit the Midwest this week, the attitude of the market is the crop is going to show solid improvement.
I have to tell you I don’t agree. My bias is the beans have been hurt and the yields going to decline. The problem is I can’t prove my opinion right now and must be content to allow the beans to break.
I would suggest Nov. beans has the ability to break into the $12.10 to $11.80 is a solid speculative buy but no assurance with held. So anybody wanting to buy beans must recognize there is going to be a lot of market volatility over the next few weeks in beans until we answer the question: Are yields above 42 or below 40? Any confirmation of beans yield below 40.5 must be given a lot of respect for upside risk.
As for wheat, the July 09 contract has now experienced a major correction over the last 6-days, which makes one only look back with amazement. The drop from $10 just six days ago to the recent $8.12 level reveals a market that’s capable of moving very fast.
One would have expected wheat to remain firm until there was assurance that acres would be up but it appears worldwide supplies are solid and buyers are now going to take a wait and see attitude.
The issue now becomes where does wheat find price stability? We are now at a logical place of $8. One would assume we would trade here for a few days before the market attempts a couple of times to break to the downside and try to blow out the remaining longs.
If this does not happen, I have to believe we will see solid price recovery as we move into December. I however have to stress that getting back above $9.50 is going to be very difficult unless we see a solid improvement in the corn, bean and oil market.
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.