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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.

The Grain Markets Rally!

Mar 03, 2010
Today’s rally has helped lift everyone’s spirits. You can almost hear the bulls panting waiting for a bullish report next week so they can jump into the corn and soybean markets and lift them to the heavens. Their argument is: "let’s face facts, it’s March and there is snow on the ground, planters will want to move in less than three weeks, and nothing is going to get planted on time."
 
My objective is to get producers to sell their crop; I hope the market can catch this bullish attitude and indeed push prices back to the pre-January report highs. If this would happen, based on USDA cost data, U.S. producers should be offered a profit level that has only been exceed by the 2008 and 2009 price events that I believe were an exception rather than the rule.
 
Conclusion: Let’s now hope that we get a bullish report next week and everyone gets bullish about spring weather. It will give producers a great chance to make “catch-up” sales at levels that we all know present an excellent selling price for expected 2010 corn and soybean inventory.
 
Contracts being monitored for input cost control: The 10-year T-Notes remain firm in the March contract right under 119. I still suggest this is the last strong drive up for all interest rate instruments. Focus on being a scale-up seller from this point forward. The big problem I see now is what happens when the March contract goes off the board. There is already an exceptional difference between the lead month and deferred contracts.  
 
May natural gas has stabilized at a price decline that started back in December. While this may be the low, I am in no real hurry to suggest buying before the seasonal low time period in the summer months.  Again, remember buying natural gas is used to offset future nitrogen cost exposure. The objective right now is $4 or lower, if possible.

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. 2010.
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COMMENTS (56 Comments)

Anonymous
Hey 3:09--A day in the life of a farmer: Up early and check mailbox for gov't check. Then off to coffee to brag to the boys about the new tractor/combine/planter I am getting for spring. Mid morning stop at someone else's landlord to offer more rent for their ground. Stop at the co-op to ***** about the high cost of fertilizer and chemicals. At noon head over to the implement dealer for the free lunch open house. ***** at the salesman that new tractor/planter/combine is not ready for delivery yet. Early afternoon stop by the Ford/Chevy dealer to see when all the new chrome will be in for new pick-up I just bought. On the way home stop by the grain brokers office to ***** at him about all the grain I have left to sell because I didn't listen to him in December. Stop by the seed dealer to ***** at him about the high price of seed and to tell him I heard so'n'so got a better deal than I did. Stop off at another landlord to offer more rent than their present renter is paying. Be home before the wife so I can check the mailbox again for gov't check. Wife is late so my supper is late also...
Ok some of you will think me bitter. I have been in the ag retail world of seed/chem/fertilizer for 20+ years. Tired of watching this go on day after day. 20 years ago you all wanted the government out of the grain markets. For the most part now they are from a price support perspective. It' a free world market. Now you guys want the government to get involved and regulate the volatility? You should all spend one season in my shoes. I also farm so I know what kind of stress your dealing with.
5:48 PM Mar 9th
 
Anonymous
Too much product traded on paper. It is to easy to make money when you never are the ones that has to get the crop in the ground and to the elevator and then on the other end never take actually have to handle the crop just deal with it on paper. The market and the people running it are creating a monoploy in the farm industry. Just wait until the big corpartions have the control of most of the farm ground. You want to here people complain of high food cost, just wait. People complaing know but still run out and buy their $40 to $50 thousand dollar SUV to take their family on a sky trip, etc... but complain about a $5 dollar hamburger on the trip, ( should cost you $20 compared to the gas in your tank and the taxes on your SUV)???Cheap food policy. Makes the country look good if they can feed most of the people but make the one producing the product struggle. Haven't heard much from Bob. He is waiting until the report comes out so he can say told you so.
2:09 PM Mar 9th
 
 
 
 
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