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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.

Soybeans take a break today

Jun 03, 2009
The bean market, after going above $12.26, has decided to take a break. The bull spreads have come under assault as both the public and funds appear to be rolling their long positions from the July contract to the November contract.  We continue to believe that the real price squeeze is still in front of us for the old crop beans. If we see confirmation that old crop supplies are below 100 million bushels in the June USDA Supply and Demand report, it will be a matter of how the cash markets are going to respond. Will the end users get worried and cover, or hold off for new crop? Will the longs try to squeeze the short out? The word is out on the old crop, so it’s no surprise, now the question is will anybody be willing to buy? I said on the show “U.S. Farm Report” that the old crop beans could do about anything it wants from mid-June to late August. Any problems with crops will be magnified.
 
End result: While $10.75 Nov beans, I believe, is a fantastic price, market volatility between now and November could be huge. I know you don’t like spending the money but the best way to sell inventory right now is in the form of an at-the-money November put. Granted it cost a lot but you get about 50% of what ever upside potential that may develop.

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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