Tis the season!
Dec 22, 2009
It’s the holiday season. While most of our thoughts are probably on Christmas shopping and enjoying the holiday season with family and friends, the futures markets continue to grind on. During the next two weeks we will very likely have noticeably less of the normal players in the market. This can lead to thinner trading activity that many times moves the market in less than predictable ways. Monday was such a day. The grain markets started out calm and then suddenly jumped on limited fundamental news and more about short-term technicals and thin trading. Bottomline: A few players sometimes can move the market temporary, which is what we saw Monday.
Looking forward I feel today’s action took a lot of the bulls’ “energy” away from them. I believe the corn and bean bulls will need some solid fundamentals to move the market higher from this point on. One event that is coming up around the first of the year is the index funds’ realignment of commodities. There are rumors that it’s going to be big. All I can say is, when everyone is prepared and waiting for something, it can fail to meet expectations.
I continue to warn producers that are holding bean inventory that once we have a solid confirmation that the South American crop is on the way, it’s going to be increasingly difficult to hold bean prices together. This implies producers of 2010 inventory need to be get a floor under the position anytime it is trading between $10 and $10.50. Granted, I don’t believe it can get below $9 for some time and the risk of $12 is always in the wings; again, I believe it’s time to get a floor under expected 2010 production.
I assume some have sold a large percentage of their expected 2010 corn crop; I will be asking producers to decide on how much risk they want to take on short positions during the seasonal [April to July] weather scare time period. Since I assume most producers have locked up fair profits, I will be arguing to defend rather than selective trade the positions. We will be discussing buying techniques in our upcoming AgWeb comments. What form do you want to use to hold short positions for expected 2010 production?
I encourage everyone to get their market plan written down now for the 2010 and 2011 crops. Only by knowing where you want to get to, does one have any hope of accomplishing their objectives. If you are need help, call us at (800) 832-1488 [Rowland & Laura] or at (877) 898-4324 [Bob].
Bob’s Upcoming Speaking Engagements:
Periodically go to www.utterbackmarketing.com and click on “Upcoming Seminars.”
January 2010: Orlando, FL ... New Bern, NC … Louisville, KY … Indianapolis, IN.
February 2010: Louisville, KY … Anaheim, CA.
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.