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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.

Weather concerns continue

Feb 06, 2009
Beans and corn closed the week strong on continued concerns about Argentina’s weather situation and the expected big government stimulus bill. It appears that Monday is going to have a lot factors which could be bullish, including concern that hot and dry conditions could continue for the next two weeks in South America. Since much of their bean crop is equal to the first week of August for us, we all know rain or heat at this time can have a big yield impact. Additionally, going into the close on Friday the expectation is we will have a stimulus bill confirmed by Monday which is generally considered inflationary. Then, on Tuesday, we get a supply and demand report. Our expectation going in is corn carryover may increase while the bean numbers will remain stable. There could be some adjustment in the global wheat supplies due to China and Argentina weather problems. 

So the issue will be has the worst been seen (the labor statistics on Friday and the big carryover numbers in the Tuesday’s report). Essentially, expectation seems to be growing that the Chinese are buying now as suggested by the increase in the copper prices and the ocean freight rate increase. This is motivating the funds to get long.  Essentially, we are going to test where the global economies can be uprighted strictly by government spending.

Please note: I have been wanting to buy December corn below $4. I would suggest December corn at $4.20 is in no man’s land. It’s not high enough to get excited about selling but not low enough to get excited about buying.  I still want to be a buyer of corn below $4.05 after next week’s report but before the end of the month.

As for wheat, I would be using any strong rallies to get caught up on harvest related sales as well as focusing on selling price recovery above $9.60 to $10 in November beans to get a strong part of the 2009 bean crop sold.

Final comment: We are now in the crop insurance season. We realize it’s a big financial expense but taking out an 80% CRC crop insurance program on beans could really give you a solid financial reward.  By having the insurance in place and then selling the cash the potential for returns will be huge. If you have any questions about crop insurance give Rowland a call here at UMS at 1-800-832-1488.

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. 2009.
 
 
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