Record Cold Temperatures to USDA Reports -- All in a Week
Jan 10, 2014
January started out with a bang, from record cold temperatures throughout much of the United States to a few surprises in the USDA reports. So let’s take a look, as for weather much of the Midwest will be above freezing this weekend with some areas calling for rain and the potential for flooding in January.
Now on to the reports, in a nutshell the corn numbers were considered bullish with a reduction in yield from 160.4 to 158.8 per bushel as well as a reduction in ending stocks at 10.426 billion bushels. What does this mean?
The slow grind down is over for now but it will be difficult for corn to move higher. December closed at $4.582 and one should anticipate a choppy to sideways trading band between now and the March Prospective Planting report with $4.70 to $4.75 as strong resistance and it would take some type of weather event to go above this level.
Soybeans came in at trade expectations so there were no surprises and continues to be at risk for lower to choppy trade. South America continues to have a great growing season along with continued rumors of the potential for increased 2014 planted acres in the U.S.
If corn were to see a weather event this spring, it will only add to the bearishness of beans. Producers should have a marketing plan in place with the decisions made as to how and when they will sell their soybean production. $11.09 is now resistance for November 2014 soybeans and the close below $11 makes way for the next downside objective of $10.69.
Finally wheat took the worst hit today with July wheat closing down 13 cents at $5.806.With increased wheat stocks and a loss of winter wheat acres one would have to anticipate very little recovery from today’s down trend. Look for our recommendations in the beginning of the week.
To help producers develop, implement and monitor the various risk management opportunities ahead, we are starting a consultation service where we merge crop insurance with cash sales, options and futures strategies to evaluate and manage risk.
If anyone feels they need to put structure into their risk management program and would like to discuss marketing strategies, call Bob or Laura (1-800-832-1488). We will also try to answer questions in upcoming blogs and we welcome emails to firstname.lastname@example.org or email@example.com.
THIS MATERIAL HAS BEEN PREPARED BY A SALES OR TRADING EMPLOYEE OR AGENT OF UTTERBACK MARKETING SERVICES, INC. AND IS, OR IS IN THE NATURE OF A SOLICITATION. THIS MATERIAL IS NOT A RESEARCH REPORT PREPARED BY UTTERBACK MARKETING SERVICES, INC. BY ACCEPTING THIS COMMUNICATION, YOU AGREE THAT YOU ARE AN EXPERIENCED USER OF THE FUTURES MARKETS, CAPABLE OF MAKING INDEPENDENT TRADING DECISIONS, AND AGREE THAT YOU ARE NOT, AND WILL NOT, RELY SOLELY ON THIS COMMUNICATION IN MAKING TRADING DECISIONS.
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
THE RISK OF LOSS IN TRADING FUTURES AND/OR OPTIONS IS SUBSTANTIAL AND EACH INVESTOR AND/OR TRADER MUST CONSIDER WHETHER THIS IS A SUITABLE INVESTMENT. PAST PERFORMANCE, WHETHER ACTUAL OR INDICATED BY SIMULATED HISTORICAL TESTS OF STRATEGIES, IS NOT INDICATIVE OF FUTURE RESULTS. TRADING ADVICE IS BASED ON INFORMATION TAKEN FROM TRADES AND STATISTICAL SERVICES AND OTHER SOURCES THAT UTTERBACK MARKETING SERVICES, INC. BELIEVES ARE RELIABLE. WE DO NOT GUARANTEE THAT SUCH INFORMATION IS ACCURATE OR COMPLETE AND IT SHOULD NOT BE RELIED UPON AS SUCH. TRADING ADVICE REFLECTS OUR GOOD FAITH JUDGMENT AT A SPECIFIC TIME AND IS SUBJECT TO CHANGE WITHOUT NOTICE. THERE IS NO GUARANTEE THAT THE ADVICE WE GIVE WILL RESULT IN PROFITABLE TRADES.