Published on: 16:47PM Nov 23, 2009
All markets opened with a bang today. Gold moved up to record highs. The Dow, at one time was up over 143 points and oil was strong across the board. This extremely strong outside price move, I believe, caught the sellers off guard in grains. A lot of elevators were sellers on Friday in anticipation of a good harvest weekend. Producers have really pushed hard and gotten a lot done. So it was logical on Friday to expect weakness on Monday. Well, with the outside market action the bulls were stampeding from the open, and pushed lead month corn to $4.03 overhead resistance and January beans to $10.48 shortly after the open.
So the bulls had the upper hand initially. Then a strange thing started to happen. Basis has started to widen for old and new crop corn and beans. If you’re a bull this is not the type of action you would like to see in the cash market. I’ve been talking to producers in central Illinois who are reporting basis has widen to at least 40 cents under in many regions for first half December delivery and it’s getting wider.
By mid-session the market rally in grains and oilseeds started to see some cracks and by late session we started seeing negative price action in corn and beans which I originally expected last week. So, today the grains moved opposite the outside market because of underlying non-confirmation in the cash market, I however would not be surprised to see a recovery later this week in grains.
A note to all producers: I’m starting to get some calls from cash-only subscribers interested in long term hedging. Normally, I start getting these type of inquires just before the high. Most target selling prices are still better than 20 to 40 cents above the market. History suggest to me when producers start getting ready to sell above the market either one of two things happen. The market fails right below their objective or we blow through and force weak sellers out of the market before turning lower. I strongly agree with clients that selling December 2010 above $4.40 represents clear profit, the key right now is to know how much cash flow exposure you can handle and implement a selling strategy that you can live with regardless of what the market throws at you. If you are interested in a detailed marketing plan outlook call us for a trial to our internet web site. Ask for Laura at (800) 832-1488 or e-mail [email protected].
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. 2009.
January Soybeans Daily Numbers & Trade Ideas for 11/23/09
December Cattle Daily Numbers & Trade Ideas for 11/23/09