Markets Are Hot As Midwest Freezes
Jan 07, 2010
While most of the Midwest is in the grip of Old Man Winter and everyone is getting cabin fever, the markets are showing plenty of sparks to keep them warm.
The corn market opened higher, but started to fail under pressure of a very bearish bean market. It appears producers are starting to realize the time of high soybean prices may be coming to a close as the South American crop appears to be looking very solid and the potential for an increased carryover in next week’s supply and demand report looms over the market. If I heard it once, I sense many think soybeans are running out of time. We assume those following our strategies (posted to our website) have about 70% of their expected production hedged and they want to move to 100% sold if the market moves above $10.40 in November soybeans. We encourage producers to catch-up on sales if there is any bullish reaction to next week’s report.
In regards to corn, the market has been unable to move above $4.25. This has proven to be very stiff resistance and $4 is very stiff support. To move the market out of this trading band the market is waiting to next week to see the result of two events:
1. The level of outside index fund money that is expected to be reallocated to the corn market, and;
2. Tuesday’s USDA Supply and Demand report.
Essentially, has supply increased or decreased with last fall’s poor harvest conditions versus the expectation of good yields? We have been hoping for a bullish report and bearish reaction, but it looks like the market is preparing for a bearish report because of expected significant cash inventory for both corn and beans that is going to be moving into the production channels between now and early March. We believe that selling both old and new crop corn at current levels represents a great value. Once short, we suggest focusing on taking advantage of any type of serious correction into February to buy summer weather protection.
I encourage everyone to get their market plan written down now for the 2010 and 2011 crops. Only by knowing where you want to get to, does one have any hope of accomplishing their objectives. If you are need help, call us at (800) 832-1488 for Rowland and Laura, or Bob at (877) 898-4324.
Bob’s Upcoming Speaking Engagements:
Periodically go to www.utterbackmarketing.com and click on “Upcoming Seminars.”
January 2010: Orlando, FL ... New Bern, NC … Louisville, KY … Indianapolis, IN.
February 2010: Louisville, KY … Anaheim, CA.
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