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Outlook Today

RSS By: Bob Utterback, Farm Journal

Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.

Today’s report and market reaction

Nov 10, 2008
The November USDA Supply and Demand report came out very close to expectations. Production was a little lower but exports were reduced because of concern about weak global demand. Bean carryover was left unchanged at 205 billion bushels but corn was increased 1.124 billion bushels. The commodity with the real concern will be wheat with an overall increase in domestic and global carryover. The other commodity that was hit hard today was cotton. World stocks increased from 55.45 to 57.40. 

The big impact is that the bearishness of wheat and cotton is going to force crop mix decision modifications for many Southern producers next year.  The tone I’m getting right now is with lead month cotton below 40 cents, acres are going to shift to beans.

I was a little surprised with the lack of follow through to the bean market today. We had overnight session up clear to $9.51 but then fell on confirmation of the numbers the trade wanted. You never like a positive report and bearish reaction. This could keep beans in a very choppy trading pattern over the next week. Many traders in beans will be watching crude oil and the dollar for direction.

As for corn, the carryover numbers are not moving in the direction for higher prices. Granted we are getting close to the time period when the bin doors are going to shut, but the potential of significant price recovery is difficult to predict with carryover increasing. The market is going to have to see positive signs that economic conditions are not going to decline any further and no further drop in demand before any type of sustained rally can occur.  Essentially, I’m not really that bearish to lead month corn below $3.75. The issue is how much rally can we really expect to see?

Side note: I continue to be worry about the hog and cattle sector because of potential exposure of reduce export of products. This is something we are going to have to watch very closely.

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.
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.
 
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COMMENTS (1 Comments)

Iowa Bob
Allot of corn in the fields here in NW Iowa yet, bad weather is here, ice, rain, snow.
With the inputs so high on corn not any corn on corn next year around here, MORE beans no matter what bean price does, corn at $3.40 - $ 4.00 locally won't plant much next year.
9:05 AM Nov 11th
 
 
 
 
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