Given the carry in the corn market, Bob Utterback says he suggests focusing on selling old-crop corn via the July contract. "However, the charts are flashing caution—there's a chance for a breakout to the upside. As a result, I would buy deep-in-the-money puts rather than sell futures at this time.
"Regarding basis, I think it is prudent to remain open unless you are going to have to sell during January or February,” he says. "I think basis on stored grain could improve all the way into June.
"The only cautionary note would be if you get the opportunity to lock up a strong basis, because if the market does bounce up next spring, basis recovery may not be as fast as one would like,” he says.
For soybeans, Utterback notes, "USDA's November report suggests that the situation is getting increasingly negative. Domestic supply is up, as is expected South American production.”
Key Market Factors
> Record-slow harvest finally got under way; will drag on
> Technicals indicate some strength could develop soon
> Weak basis through year's end
Percent Sold and Market Value on Nov. 1, 2009
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