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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.

How much lower can corn go?

Jul 22, 2008
I was on the road yesterday down to Evansville Ind. Overall, the crops looked stronger than I expected.  My comments back in June was as soon as the corn got tall and we could not see the wet spots the corn market would be in trouble unless we had a lot of heat. Since June 27th, the break has been decisive and extremely painful for the bull but it has bailed out the bear or feed buyers wanting to get next year’s inventory protected. 
 
The issue now is how much further can we go?  I would suggest a close below the $5.95 level for Dec corn is the last good technical support the bull has. If this level is breached we could set up for a final long liquidation break which could push corn clear back to the $5.50 level. 
 
My bias is the corn crop yield is still very uncertain, but I must accept it’s not getting worse, the only issue is are we simply stabilizing the yield or improving yield prospects? In my gut I believe we will end up some place between 148 and 152. The trade I believe is trading as if it’s 152 and growing.  I’m working on the assumption that a 1993 strong fall price rebound is still a very strong possibility. This implies I want to become very aggressive about buying feed needs and reducing the size of my hedge position.  The exact timing is difficult but I would suggest shortly after the August Supply/Demand report to early September, one should have all long positions in place and significant reduction in the overall short position.
 
 
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.
 
 
The recommendations and opinions contained herein are based upon information from sources believed to be reliable. However, that information may be incomplete and unverified. There are numerous factors that can affect the markets, which cannot be fully accounted for in the preparation of these recommendations. Those following these recommendations do so at their own risk. The firm and/or customers of the firm may take a position that may not be consistent with the recommendations herein. Any recommendation does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any commodity interest. Commodity trading involves risks, and you should fully understand those risks before trading. 
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COMMENTS (3 Comments)

Anonymous
Grass in green here in MN too and crops look good, but behind normal. I think as long as we have a later frost we will have a very good crop. Beats the last 2 years of drought.
6:53 AM Jul 23rd
 
Anonymous
my bell weather indicator is the health of my grass of my lawn, typically its burnt up by mid July, however, its never been stressed yet this year and is green and lush, my crops are enduring the same scenario so I'm looking at above average yields across the board, my wheat is a bell weather too, it hit 140 bu. plus in may areas of the fields this year and averaging well over 100bu/ac, extremely blessed, so I'm hoping for a blowout yield on my seed corn and soys having locked in 50% of 08 physical pre JULY 4th weekend holiday.
12:13 AM Jul 23rd
 

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