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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.

Market down and producer sentiment is subdued!

Jul 26, 2010
I spoke at Purdue’s Top Producer workshop and Farm Journal’s Corn College last week. Producers were neither bullish or bearish about the market. Overall, I would have to suggest the attitude seems to be very subdued. This behavior is not really a surprise in light of the significant price movement we have seen before and after the USDA acreage report. Right now, I would suggest we have a very good crop coming on board overall, with a lot of holes due to the June rain. The test weights will be good as contrast to last year. My bias continues to be that we will be surprised as to how good the crop will be once the final numbers come in but the Chinese buying pattern will keep lows tempered. 
Long term, the real concern will be how much weakness will the domestic and international economy experience over the next year. Bottomline: December 2010 corn will have difficulty staying below $3.40 for any length of time but equally it will have difficulty spending much time above $4.25. This range-bound type market will be difficult for trend followers since no trend exists. It will also be difficult for clients who are long out-of-the-money calls or puts since the risk volatility will tend to drop as we move into fall and time value will occur. Subsequently the cost of the premium will be greater than the flat up or down side potential of the market.  

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. 2010.
 
 
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COMMENTS (8 Comments)

Anonymous
Discount for protein went up to .15 a fifth today. Last quote was off a bit. 1.50 a bushel discount for protein. 2.87 a bushel for 10 protein spring wheat.
11:24 PM Jul 28th
 
Anonymous
Cash winter wheat in my state is at 4.37 with a 2.00 basis. Also .10 cents a fifth protein discount. Makes 10% protein winter wheat at 3.37 a bushel. wow
9:48 AM Jul 28th
 

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