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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.

Positive bounce in the market prior to tomorrow's report

Dec 10, 2008
The corn and bean markets saw another positive price bounce, but concerns persist! After last Friday’s wash out and early week price recovery, many around the trade want to be the first to say the lows are in for many of the commodities. While I would love to embrace that assumption, I believe we need a solid retest-and-hold situation to say the worst is behind us.  

I believe there is the possibility of a retest over the next three weeks. First, expect this week’s USDA Supply and Demand report will more than likely have limited supply reductions and some downward adjustments in demand. In my opinion, carryover will drift up rather than down. My second concern is dumping losing positions for tax purposes between mid-December and the end of the year. I really don’t know if there will be any dumping of contracts, but if there were ever a year for this type of event to occur, this year would be it.

The outside markets, specifically crude oil, are a concern. The talk is Saudi Arabia will announce that they will reduce production. As many in the trade have suggested, it is one thing to announce it, but it’s another to get compliance. Will the other oil countries that are strapped for cash flow comply and keep production in check or will they increase production for much needed money at the Saudi’s expense? 

Finally, more job layoffs are being announced almost daily. Many worldwide economies seem to be slowing down daily. Implication: How will demand [domestically and internationally] be affected? Right now one would most likely be a little cautious on projections. I expect this tone to be present for the first quarter of 2009.

Will we see the market correct and hold between now and the end of the year? If the market does this, there should be some [technical] confidence that a low has been confirmed. As to the level of the price recovery, it’s going to be slow and limited until we confirm three things: how bad has demand been hurt, how many acres are expected to be planted, and what type of planting weather are we seeing?

I’ve been on vacation in Florida and enjoying the 60°F and 70°F days. Next week I’m back at the office, along with the cold weather and snow. Have a good day!

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 (3 Comments)

Anonymous
The technicals of the market this summer could not save the rally, why would it tell us if a low is here. A wise old farmer said too much talking can't be any good. Both ends have manifested.
10:47 PM Dec 10th
 
Anonymous
Doom and gloom, doom and gloom, Bob, you are more part of the problem than part of the answer. People need to use good sense in times like these, they don't need to spend their hard earned on someone who tries to scare them into believing they aren't smart enough to market themselves. Spend a little energy blogging positive in stead of trying to sell a complicated strategy that, frankly, didn't work too well last year.
8:04 PM Dec 10th
 

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