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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.

My thoughts on grains pre-report?

Sep 11, 2008

Crude oil and the dollar index continue to put pressure on the big index funds to liquidate their once golden holding. The investment community is getting a strong dose of reality now about commodities and it’s not liking it. I would not be surprised if we see a lot of board of directors changing their attitude about investing in commodities for a while. As the money dries up, it’s going to take more and more bullish news to keep the market stable. 
 
The Supply/Demand report out tomorrow is expected to show little to any drop in corn and bean yields, in fact I believe one must be prepared for an increase in numbers. The player who’s betting on reduced yields really has to wait now until the combines really start to run. If we don’t see any material loss from the frost later next week I believe it will be difficult for the bulls to hold ground. A final flush in the commodity sector could really be seen over the next 30 to 45 days. 
 
This is exactly when end users or persons looking at long term reownership should be getting prepared to buy for a long term sit and hold position.  The reality -- everybody is now getting bearish! So all feed buyers out there really need to start scale down buying December 09 corn below $5.70 and be essentially done by mid-October below $5.50 level.
 
As for beans, I believe we are approaching the last real chance for beans. If we don’t confirm yields below 40 bushel this fall, the beans are done. I want to suggest acres are going to explode domestically and internationally while demand is going to stagnate. This is a formula for long-term problems. I would strongly recommend all clients to be working hard on scale up selling November 09 beans starting at $12 plus.
 
Bottom line:  I’m starting to be very concerned that while we will get confirmation of lower corn and bean yields it’s going to be difficult to get the magnitude of the rally that we want because of  a stronger dollar, reduced levels of speculative fund money and finally a change in attitude toward ethanol government mandates. This suggests December 08 corn above $6.50, wheat above $10 and beans above $14 will now be extremely difficult to see in 2009.
 
 
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.
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.
 
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COMMENTS (1 Comments)

john oke
Right on the money
7:07 PM Sep 13th
 

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