Bob Utterback has more than 26 years of experience and offers producers a disciplined approach to marketing.
Dollar Down . . . Grains Up
Oct 26, 2010
It’s the same old theme. The dollar is down and grains are up. The pattern seems to be too simple but its the dominate force right now. The holders of the dollar don’t like what’s happening with our economy and the government trends towards inflation. They know they are better off holding “things” rather than paper. Subsequently, I see no slow down in exports and demand will be the last thing rationed not the first.
As for the supply side of the equation, harvest is essentially done. The bid doors are going to shut and limited product movement is expected until after the first of the year. Basis levels should improve rather quickly and even present some excellent. This means as producers you need to keep your eyes open to the potential of some good basis improvement bids going into the end of December that you will not be getting in Jan to March time period when producers normally move cash inventory for needed payments.
As to upside price potential I really believe most of the bullishness of this year’s supply reduction will be factored into the markets before the January reports. So producers need to be getting prepared, we are putting the finishing touches on our selling article. It’s will be free to brokerage clients but a $75 cost for non-clients, call 1-800-832-1488 for details.
While corn export and ethanol demand is showing no signs of weakness the hog sector is going to show big drops really soon. The current hog slaughter is way above normal and I would suggest indicating strong culling of gilts. Bottom line: By Thanksgiving, we should have most of the big slaughter worked into the market and setting the stage for stronger prices as we move into 2011. I suggest hog producers who are short to consider puts over short futures or cash contracts. Second, for speculators you may want to consider selling second half of 2011 out of money puts on oversold conditions.
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. 2010.