By: Bob Utterback
, Farm Journal
Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
Soybeans continue to be range bound
Nov 18, 2008
While the bean market continues to have decent daily price ranges, we are essentially trading the overall same price range we have been for some time.
It’s difficult to get the January beans above $9.20 but equally difficult getting below $8.75. The very tight trading range is developing because the fundamentals are not really clear to which direction things should go. We know that the seasonal pattern should be building for strength into December as uncertainity about the South American crop builds.
In the export market buyers are starting to accumulate positions right now which are bullish. For example, Iran is in the market for some meal and oil which is considered positive. On the negative side, talk is starting to surface there may be a big break in meal needs after the first of the year. Poultry starts are down rather big, along with big loses in pork and beef. Essentially, some herd liquidation is going to be seen. Finally, long term everybody is concerned about big acres coming into beans both domestically and internationally.
As I see it, producers really want the bean market to move higher to price unsold inventory and get ready for next year. End users are buying hand to mouth because they simply don’t know what demand is going to do. This all suggest to me that producers must be short term in thinking. Trade the ranges and not be too greedy with their objectives.
In our brokerage accounts we have been very active in short term trading. Our objective has been to make at least 5 cents, happy at 10 cents and jump up and down at a 15 cent gain. While I know this can not go on forever, for now it’s building the accounts at a solid pace which is what I like.
So until I see the outside markets close above overhead resistance and give solid technical moving average buy sides my bias is to trade the trading range. Sell $9.16 to $9.21 and buy $8.85 to $8.75.
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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.