Sep 17, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin


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.

USDA Supply & Demand report and weather support concerns in corn and beans.

May 12, 2009
Today was USDA Supply and Demand report day. The report came in very close to expectations. See our internet web site for the actual numbers. Overall, for corn projections are now at 1.145 billion bushels for the 2009/10 season and beans at 230 million bushels.  
 
In regards to corn the interesting fact is USDA used ethanol projection of 4.1 which is unchanged even with all the EPA discussion about changing ethanol standards. The troubling factor is they used an average yield of 155 bu. per acre and 85 million planted acres. Both of these variables will be closely monitored now. The bias by most in the trade is they could slip due to late plantings. Bottom line 1.145 billion bushel is adequate and should not support prices much higher than current levels.
 
The bean numbers continue to support the concern about tight old and new crop beans. The market, however, saw active liquidation of the long-July and short-November price spread. We would view this as only temporary. Any move back into the 80- to 90-cent level we anticipate will be heavily bought for one more attempt at higher price values. Bottom line: It’s going to take a yield drop of some significance now to push November 2009 beans above $10. A breakout above $10.50 would be very bullish and force us to adjust all net short positions.

Weather Report:
TUESDAY    MORNING   WEATHER   5/12    WXRISK.COM
Once again the  various weather models  have more uncertainty in the  11-15  day. They  are in strong agreement  about  the  MAY 12-14 cold front   but    things  are somewhat uncertain  with regard to the MAY 6-17  cold front. The 1st cold front  MAY  12-14  brings   good rains to   ND and northwest MN  and over  southern Manitoba (MB)  but over  SD   lower  MN  NEB and  western  IA  this  front  bring   rains under 0.25" with 40% or less coverage. 
The  2nd front  on MAY  16-17 appears to  be the same. Not much  for the  Upper  Plains  into  MN  and  NEB then   rapid increase in coverage and   amounts  central & eastern  KS  and ALL of the Midwest...70%  coverage of 0.50 to 2.00". Some of the models are slowing the  front down once it  reaches  the   Delta and  ECB. If so  this  would add  additional  rains to  eastern  OK  eastern TX MO ARK  LA KY  into the  ECB.   Right now this aspect of the MAY 16-17 cold front is  uncertain. All  weather Models  develop a HUGE ridge  in the Jet stream over the  West coast / Rockies   this  weekend into next week  BUT now a  new trough comes into  western Canada  by day 9-10. This trough  forces the  Ridge over the western CONUS   east to the   SE coast  and  that allows  a  for  POSSIBLE  new cold front to move  into the Upper Plains and Midwest...  MAY 20 - 21  and this front    MIGHT  linger over the  Midwest to MAY 24-25.

BOB’S TAKE ON WEATHER:
  We are not going to get a solid 7 to 8 days of dry weather. This means the central and eastern Corn Belt is going to be planted under stress. A lot of ponds will not be planted. This implies we will need near picture perfect weather this summer to get the USDA's 155 bu. corn yield.  I’m already suggesting a yield closer to 153 bu. should be considered. The final big factor will be how many acres will we lose in corn due to not being planted. At this stage we need the 85 million acres. If we drop below 83.5 million acres it could get dangerous for sellers. This is why producers are advised to maintain a “put” strategy until after the June acreage report.

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.
 
Log In or Sign Up to comment

COMMENTS

No comments have been posted, be the first one to comment.
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions