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March 2011 Archive for 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.

Market Outlook?

Mar 30, 2011

This week we will see the much expected March prospective plantings report and quarterly stocks report. The tone of the corn market -- expect planted acres below 92, but slightly higher stocks.  I believe we are going to get more corn acres than expected. The dominant fundamental factors for the next couple of weeks will be how fast corn and soybeans get planted and how demand holds up.

It will be difficult getting corn and soybeans prices back to their winter highs without some weather problems. I expectation is building that we will have an overall normal yields with a few pockets of stress just to make it interesting.
 
Bottom Line. By the time it’s all over the recent highs in Dec 2011 corn and Nov 2011 soybeans will hold unless we see a significant weather event. I believe producers should be getting close to 60% of their expected corn production priced and 40% of their expected soybean production priced with a plan offering flexibility to sell and benefit if prices move higher. Now is the time the calls bought last fall are paying off. Not only are those who bought calls last fall up a little, but they make it a very easy to sell $6 corn and $13 soybeans. If anyone has not bought calls, I suggest now waiting until after the report and buying on a technical breakout above old highs.
 
Outside Markets. The unrest in the Mideast should keep the oil market nervous. It’s common knowledge that supplies are adequate and crude oil prices are more appropriate around the mid-80’s, but the market is worried about future supply disruptions. I believe we will see $120 before we see $80 in the next couple of months. This suggests producers need to get their summer fuel needs locked up.
 
Interest Rates. Major lows were made last fall and on a sideways to higher path. While I believe there will be higher rates, there is tremendous government pressure to keep rates low. The net impact is the longer the government keeps interest rates artificially low, the higher the risk of inflation.  I have to suggest that, as we move into the latter part of 2011 to early 2012 the fed will be forced to raise rates a little or really increase the fear of inflationary pressure right as the 2012 presidential election moves into full steam.
 
If you have any questions or would like to read more of my daily recommendations regarding reownership or marketing strategies for the 2006 marketing season, 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. 2011.
 
 
 

Grain Outlook after the Supply/Demand Report

Mar 11, 2011

Before the markets opened, the monthly supply/demand report was viewed as neutral to corn at 675 and neutral to soybeans at 140, while wheat was considered overall bearish. The market, however, took an overall bearish tone from the starting bell as general long liquidation continued to overtake the market. The oil market corrected today, even with the overall uncertainty continues in the Mideast. The stock market even sold off hard as the uncertainty continues about the strength of the domestic and global economies. In the end it seems the bulls are a little unsettled right now and deciding to take a break from the markets until things look a little clearer.

Looking forward we have to say the basic fundamentals of tight stocks for corn still exist. We still need more than 92 million acres with good yields to have any solid chance of getting carryover back above 1 billion.  We expect the market will quickly find a support base and then bounce but find it difficult to rally until we get past the March acreage report. Our bias: anything below 92 million planted acres will be considered bullish for corn, while anything above 78.5 will be negative for soybeans.
 
Wet weather in the Midwest is taking away the prospect of an early start to spring plantings.  While it’s frustrating to some of the big producers, it’s not a factor yet. However we suggest if the weather continues to be cool and wet into April, the stage will be set for weather premiums to be put back into the corn and soybean complexes.
 
Overall, we believe the market is providing feed buyers, as well as those who want to rebuy inventory, an excellent chance to get positions in place in the next few trading sessions. We like selling May puts and buying July calls to provide spring and early summer protection. If you have a question, give us a call at 1-800-832-1488 or 1-877-898-4324.
 
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. 2011.

 

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