Friday's Supply/Demand Report?
Sep 15, 2008
On Friday, the market had a lot of information to digest. The Supply/Demand report came out and it surprisingly lowered rather than increased [like many advisory services were suggesting prior to the report]. The yield at 152.3 is very close to long term where we thought it would end up.
The problem I see developing is for whatever downward revision in supply that develops we could equally see a little lowering of demand. The real excitement for corn will start after harvest when the bin doors shut. Exactly how many of acres of corn will producers elect to produce next year when cash rents are exploding along with input costs. Right now the “talk” is no increase and acres may decrease. Bottom line: with today’s report I believe we have reduced the potential of Dec 09 corn testing below $5.50 now to very low levels. All buyers need to be scale down buying over the next four weeks. I would set your target of being completely purchased before the October Supply/Demand report. As for selling, all producers are suggested to wait until the Feb to March time period to price both old and new crop inventory.
Over in the bean complex the market rallied but not as much as one would think with yields being lowered to 40 bushels. They broke above $12 but were not able to hold. While the domestic supply is being reduced, global supply of beans was increased in this months report. Talk of late rains is going to help the late planted beans which will eventually help increase the U.S. bean yields. I don’t’ know if I agree but early group two bean yields in Indiana I’ve heard are coming in around a solid 55 bushel level. My preference continues to sell beans off the combine and use strong price gains above $12 to start aggressively scale up sell of Nov 09 beans. I’m really concerned that acres are going to be up domestically and internationally next year while at the same time demand will be stable to slightly lower. This all suggests some really strong downside price pressure could develop by the fall of 2009.
As for wheat, there was no positive news. Production is increasing globally. The trend is sideways to lower. All producers are encouraged to sell any 30 to 50 cent price bounce between now and early December. The risk long term looks lower.
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.