How the Short-Lived Bull Market Got Its Claws

April 25, 2016 12:00 PM

Money flow and perceptions about the future of the soybean market created significant volatility this past week, says Bob Utterback, Utterback Marketing.

“As a bear, we maybe got a little too comfortable,” Utterback tells “AgDay” host Clinton Griffiths on the Agribusiness Update segment. “We’ve been consolidating for so long, and we got a little too complacent. Last week, the market reminded us that the bull does have claws, and has big claws, if he can get a reason.”

Among the factors that arose, Utterback says, are South American production problems and a “significant change in tone” about the global economy.

“China started saying some positive things … the oil market rallied from its February lows, so everybody got bullish—well, too bullish mid-week,” Utterback points out. “As we know, November soybeans went from $10.23 to close almost back to where we started at by Friday.”

Utterback advises producers to take what the market provides, and to do so in a way that allows them to survive the emotions a volatile environment creates.

“This reminded me of the summer of 2008, the summer of 1996, the summer of 2012,” he says. “But it only lasted for five to seven days. … Those are the emotions that could resurface in June and July, and as a seller, I want to prepare for that type of emotion.”

As for this past week’s market action, Utterback views it as advantageous for many U.S. farmers.

“I think we’ve cleaned up some problems and got some new crop sold, which is a very good positive,” he says.

Click the play button below to watch the complete “AgDay” interview with Utterback.

Want more video news? Watch it on AgDay.
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