Rather big price swings for this time of year are starting to wear on everybody. While the supply fundamentals of corn and beans are important, we are now becoming quite aware that the influence of the outside trading funds is dominating the market.
The fear that last Thursday and Friday’s up and down price action is going to become the norm for the market, is driving many producers to throw up their hands and say "Forget the market. It’s too unpredictable!" I can’t say I don’t agree with this prospective, but I’ve also learned over the years when the market is frustrating, it’s normally the time to give it some strong consideration. Bottom line: When it’s easy to be a seller, I get scared but when it’s hard to be a seller it gets my attention to ask, "What am I missing?"
In last week’s special release regarding the March 1975 corn contract (the last year of a freeze and extremely poor harvest conditions) I came away with three conclusions. Once the crop gets in the bin, the bull is in trouble, I would suggest once harvest goes above 60% one should become aggressive about selling. Second, as long as the current trading prices are above the 21-day and 50-day moving averages, one should be in a limited short futures exposure such as a long put or a vertical put. If and when the market closes below the 21-day and 50-day moving averages one needs to be net short the market. Third, the high moisture levels of the harvesting corn plus disease is going to make it difficult storing the crop long term. This leads me to the conclusion that forced cash sales will have to come back into the market in January to February. This will lead to a wider than normal basis and the spreads should increase as the nearby falls to the deferred.
Special note: I’m will be on the road this week traveling down to Sarasota to set up my winter office. I will try reflecting on what I’m seeing in my Wednesday copy. If you have any questions that you would like address just give us a call at (800) 832-1488.
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.
Wednesday, November 04, 2009 3:44 PM by: Anonymous
Wow, quiet in the grain blogs, ppl must be harvesting. No rain in Iowa for a about a week, small chance early next week then clear for awhile again, but mid to upper 60's coming.
Wednesday, November 04, 2009 12:36 PM by: Anonymous
ya, im kinda envious of old bob while were in the mud getin are crops out. bob will be down to hooters studying the dynamics of supply and demand ha! ha! have fun bob keep up the good work.
Wednesday, November 04, 2009 12:20 PM by: Anonymous
we had friends live close to there. they said you could eat out every meal for a year and not hit the same place twice. and yes there is texas road house there too!!!
Wednesday, November 04, 2009 11:09 AM by: Anonymous
Sarasota,you got to be kidding me!
Wednesday, November 04, 2009 3:57 AM by: Anonymous
Trust the good ol` boy upstairs;;he will get us threw''
Tuesday, November 03, 2009 11:37 PM by: Anonymous
Anon 9:51: My only problem with what you are saying is this: not every farmer knows what his neighbor's corn crop is going to be, let alone someone states away, some have no idea what their own fields will do, - so to expect the markets to respond to a handfull of farmers saying 13 billion isn't in reach, isn't a very convincing argument.
Tuesday, November 03, 2009 10:56 PM by: Anonymous
Wonderful advice once again bob.You are the only broker i know that is in tune with the markets! Thank You
Tuesday, November 03, 2009 10:52 PM by: Anonymous
i hate to say this but life is just all about bucks,if you don`t have any be prepared to be miserable.you can`t ever be happy if all you do is worry about money......just the way it is.......
Tuesday, November 03, 2009 10:49 PM by: Anonymous
10:06 ---AT LEAST WE GET GOVERNMENT PAYMENTS,THOSE POOR LIVESTOCK GUYS DON`T HAVE A CHANCE IN HELL.A VERY BAD CHOICE TO RAISE LIVESTOCK IN MY VERY HUMBLE OPINION.
Tuesday, November 03, 2009 10:19 PM by: Anonymous
Gentleman, Don't hate the player hate the game!!!!
Tuesday, November 03, 2009 10:06 PM by: Anonymous
My direct payments are already gone. They went to the grain dryer, and even more.
Tuesday, November 03, 2009 9:59 PM by: Anonymous
Their is a Sarasota in Alaska isnt there?
Tuesday, November 03, 2009 9:51 PM by: Anonymous
SARASOTA? Thats where all the money is going. Who cares about that. Why not listen to the farmer and realize that the crop will be around 12.2b instead of 13+b that they say we are going to have. When PRIVATE reports come out, all they are doing is watching their as^es to make a dollar and dont care about the farmer. I will take your salary and you can have mine for one year and see if you can make it to Sarasota again!
