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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.

Yesterday’s report was bearish, but today’s action is bullish

Dec 12, 2008
After yesterday’s bearish report and bullish reaction there was hope the lows were in. This attitude was very short-lived. We have now essentially erased the gains seen after the report and our confidence that a bottom has been made has weakened. 

I believe the primary reason continues to be the big swings in the Dow and crude oil.  Monthly job losses are at a 26-year low and increasing every day. Talk of 10% plus unemployment is growing. The domestic auto industry is in a steep downtrend with no short-term solutions. The big issue continues to be how big of a hit does demand take?

My concern is growing that we could easily see a bearish supply/demand report as we move into February. I don’t like saying it, but the pressure we are seeing on corn and wheat could easily continue for most of the first quarter of 2009.

Suggestion: IF futures-to-arrive cash contracts have been made and anyone is still open the basis, look at locking up cash basis on a sell off in the futures market into the end of the month. If there is unpriced corn and wheat, I feel limited upside potential exists until we get some type of supply problem to develop. In the case of corn, it’s really difficult to see much upside potential until summer.

In regard to beans, the story really has not changed that much. Near-term the stocks are reasonably tight. This means beans have the best potential of a rally, in my opinion. The drawback for beans is, with high input costs and potentially tight cash flow [if bankers start to pull back], one has to anticipate significantly higher planted acres in 2009. 

The conclusion is all producers really need to pay attention to selling 2009 beans above $8 cash as soon as possible and then only defend if we get a solid technical breakout due to weather problems.

Summary: I would not be surprised to see the volatile, choppy nature of the markets continue. This will be great for the short-term trader, but difficult for long-term traders.

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 (4 Comments)

ftwo
remember you get what you pay for. of which i paid nothing for his blog
1:43 PM Dec 13th
 
Anonymous
Looks like someone is mailing it in, and not seeing the same thing we are seeing! This looks like a solid low has been set. Informa corn acres took the market by surprise. Farmers are telling the market that corn is still to cheap to plant this coming year.
7:39 AM Dec 13th
 

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