Jul 22, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin


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.

Soybeans Firm While Corn is on the Retreat

Aug 07, 2009
The beans were firm today while the corn continues to retreat.  We find the bean strength interesting while crop conditions still seems to be more of a concern right now. The crop is behind and "will it catch-up?" seems to be the bull’s big question. I have to suggest the weak dollar and continued strong export buying is the strength behind the market rally.

This leads to the major question I have as an advisor to producers: Should they be selling the beans off the combine? I went back and looked at the historical numbers for some patterns to guide me.  If you look strictly at the last 8 years, soybeans rallied 6 out of the last 8 years.  If you base your strategy on this recent history it would suggest the odds are good that bean storage would pay. 

If however, you look over a much longer history, say from 1970 to present, the odds drop to only 40% of the time. So the question is, have things changed? The answer is yes in that China is now a much bigger player but also South America is a much bigger producer. On balance I have to say the rules of supply and demand are still valid. The best cure for high prices is high prices. I have to suggest 2008 and 2009 have to be considered high priced years. 
 
In the end, will the increase in bean acres and average crop along with increased acres in South America be greater than the potential demand from China in a global economic building time perio? It’s tough to know what China is going to do but the pattern seems to be they want to stimulate domestic production and not overheat the market. The current $10 cash bid being offered for fall delivery would be a solid price to take for your inventory. If you want to speculate on a rally due to some type of weather event down in South America why not do it on paper where you know your risk.

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.
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.
Log In or Sign Up to comment

COMMENTS (18 Comments)

Northeast Arkansas II
Seems like the comments got a little side tracked!! Heres some facts, in the past we would be starting to combine our early April planted Group IV soybeans about now, but that will not happen for at least another month, if then!!!! Farmers are having to buy out of their August and early September contracts for Soybeans because they can't deliver them!!! That's a FACT. With the river terminals empty, there will not be any beans in position to export until October. Many late beans are 4 to 8 inches tall. Take a look crossing the bridge to Memphis from Arkansas, or up I 55 into Missouri.
3:22 PM Aug 10th
 
Anonymous
Farm in far northern area, and you cant touch land in my area. Three four land barons around gobbbling up all land. Paying outrageous prices, they made their money outside of farming. To throw out four five hundred thousand dollars is nothing for them. So it is the same all over as to respect to getting started farming with them around. Some just buy it for hunting others just buy it because they can.
12:11 AM Aug 10th
 

Receive the latest news, information and commentary customized for you. Sign up to receive Dairy Today's eUpdate today!

 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions