Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
Volatile markets this week in grains!
Oct 31, 2008
After a big week of volatility overall for corn and beans, the market was rather quiet today—bowing to the pressure of an expected good harvest weekend. We have three things now affecting the crops. First is harvest, beans are done and corn will be wrapping up in the next two weeks. I have to say we have more than likely no more than three more weeks to worry about harvest pressure and then the bin doors are going to shut hard.
The next big event is elections. How will the equities and ag trade as a result? I have to say the expectation going in will be if the Democrats win, it will be perceived as a victory for corn ethanol while a negative potential for equities due to higher tax expectation.
The final factor affecting the grains is the dollar. It’s remaining quite high. The fear is it will put restrictions on the exports. I have to say much of the negative of higher dollar is being offset by the cheaper freight rates. If the dollar starts to slide, as I expect, into next year and freight rates remain low, it could actually be a boom to corn and bean exports.
So what should you be doing right now? As feed buyers, I believe you have until the third week of November to get at least six months of corn price protection in place. As for selling 2009 corn production, I’m no hurry. In fact, I would like to be a big speculative scale-down buyer close to the old lows. My primary concern is about 2009 beans. If the November report can give us any type of bullish event on yields, I want to really press at trying to get a large portion of 2009 production sold between $9.50 and $10.25 CASH. Finally, in regard to wheat I believe we are at levels that should be sold but my expectation is very limited for recovery. We are going to need a little surprise on reduce planted acres and some yield concerns to get this market back to levels where it would be a decent sale. For now all I can suggest is cross your fingers and hope for a bounce.
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