Analysts: Will Bulls Be Proven Right or Wrong?

May 17, 2016 05:00 AM
bull bear

After May’s surprising USDA soybean report showed higher demand than expected, the bulls have some work to do.

“Can they prove it?” asked Bob Utterback of Utterback Marketing Services on U.S. Farm Report. “Just last week, the exports in beans aren’t up to snuff. The markets are starting to say, ‘well, you’ve got (this demand) projected and now you’ve got to prove the case.’ That’s going to be a problem for the beans.”

Utterback isn’t the only analyst with reservations after last week’s rally pushed soybeans close to $11.

“I think we’ve overdone it considerably in here,” said Mark Gold of Top Third Ag Marketing, also speaking on U.S. Farm Report. “The report was certainly friendly. Are we going to increase exports 175 million? I doubt it. … We’ve got the dollar on a 2- to 3-cent rally here, so I don’t see that it’s going to last.”

At the same time, prices of $10.64 for July soybean contracts and $10.55 for November contracts are welcome news to growers.

But farmers can’t afford to get too comfortable, given all the forces at work.

“As I’ve said so many times, we want to take advantage of the funds before they take advantage of us. If there’s anything shakes this market out, those funds are coming back out of this market,” said Gold. “This is a great time period to be selling beans, buying puts (and protecting) this downside. If we start closing higher next week and take out this week’s highs, then maybe we’ve got something going. But I’m a betting man, and I’ll bet that these highs hold maybe until the end of June, (when) we get the next Acreage report.”

Listen to their discussion, including their advice on whether farmers should be selling calls to buy puts (quick answer: no) and how the corn market is responding to these soybean moves.

Want more video news? Watch it on U.S. Farm Report.
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Spell Check

Moorhead, MN
5/17/2016 08:43 AM

  Of course these people want you to buy puts, that's how they make money from commission once you sell your put. I wouldn't fall for these bull head trading people. If you can make money with these prices, hard sell,

Bill Henry
Pleasant Hill, MO
5/20/2016 09:50 PM

  Do not listen to these clowns. They know nothing. Their interests are not the farmers interests. Commodities Media talking head's interests are diametrically opposed to the farmers. This is akin to a deer listening to hunters on how to escape being shot in the woods. If these knuckleheads offer any advice.. seriously consider doing the exact opposite

Mark C. Daggy
Humboldt, IA
5/17/2016 12:01 PM

  Farmers, if your breakeven costs are $4.50/bushel on corn and $11.00/bushel on beans, why are you even entertaining selling for less? We are in a period where the real market has taken over, and end users now must pay for the grain. Holding out for good prices will drive the market on grain up, with or without the grain traders. With interest rates at extremely low prices, do not blink and cave in to those who would literally steal your grain for peanut prices.


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