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RSS By: Bob Utterback, Farm Journal

Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.

Grains recover after yesterday’s correction

Jun 04, 2009
I sort of hoped yesterday’s correction would extend a little further before next week’s USDA Supply and Demand report. The market, however, had other ideas. The market opened firm from project (a) price recovery and then hit the gas in mid-session. Beans were the leading commodity, with old crop beans being the dominant player, up almost 43 cents. Corn and wheat quickly followed the lead of beans and moved up nicely today.

As I’ve been discussing with several of our brokerage clients over the last few days, the big price swings in grains I would suggest are more to do with outside markets than with the current fundamentals of grains and oilseeds. Fear is growing that the dollar will continue to decline and inflation is going to take off. This is triggering many investors on a global basis to look at the commodities as a very attractive way to participate. The dollar was weak today and the oils were stronger.

My bias is even if we are going to see a lower dollar in next year and higher energy values, we are due for a break. The charts are set up for a excellent double top formation to be made in June. I’m arguing that the dollar will start to stabilize for a few months and the oil will crest. Since the outside markets will not be pushing the grains and oilseeds the individual commodity fundamentals will again be the primary focus of the markets direction. My suggestion continues to be strong upside price potential exists for the month of June but as we move into early July the normal seasonal pattern will take over. So for now, all sellers are recommended to keep positions in limited cash flow exposure. We are in no real hurry to sell anything right now until we get into late June to early July.

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.
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.
 
 
 
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