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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.

Heavy rains hit the Midwest

May 14, 2009
Heavy rains hit the Midwest as forecasted. One producer I talked to today asked if the market is not up on this amount of wet weather, what does it want? The answer is the weather outlooks are looking a little dryer. It could now be suggested while not planted at the best time possible, the corn crop will get planted by the first week of June. It will not be pretty but it will be in the ground.

While a rally around pollination could be seen if excessive dry conditions develop, the greater risk is if the market consolidates into a sideways price pattern. As the July-to-August time period develops, we actually trend lower because of the significant improvement in the crop from the road. The real concern I have for the corn market would not really start to develop until after the September USDA Supply and Demand report and the crops start getting harvested.
Remember, we are going to see two crops this year. The Western states planted early and could see a great yield and while the Central and Eastern crop could be below average. This all suggest the potential for a fall to winter rally will be very high.

IMPLICATION:  All buyers of options or short futures will have to give strong consideration to adjustment of hedge positions if we start taking out overhead resistance after the August USDA Supply and Demand report. However, even with this situation developing it does not deter us from wanting to scale up sell the corn market as we move into the June-to-July time period. I continue to suggest that all clients maintain a basic put bias. This implies some strategy for defending against upside risk exposure. In my brokerage accounts we are still rolling up our long puts but holding onto all long calls. Our preference would be to be in a long put rather than a short cash sale or short futures until we get to the end of June.

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. Tomorrow we will talk a little about the bonds, gold and crude oil.
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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COMMENTS (1 Comments)

Anonymous
Have you thought about all of the acres of corn that are going to be switched to beans,including mine????
9:27 PM May 14th
 

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