The soybean market is not for the faint of heart. Granted there are good opportunities for the short-term day trader if following a very focused time count. The problem is its hard work and just when you feel a pattern is emerging the market can throw you a curve ball. Right now aggressive management of cash flow risk is critical. We would strongly encourage small positions with big reserves to back up position. This is not a time period to be a cowboy and go for the big moves.
As for the producer with no carry in the beans, anybody placing harvested beans in the bin is betting on an absolute flat price rally with no significant storage or basis gain. So you are putting up 100% of the equity which is significantly more expensive than selling the cash and putting on a very ridge long position.
As producers, I know your attention right now is on getting the crop out of the field. However you must realize this could also be a great time to be making decisions about the 2010 crop. Granted the Chinese are going to continue to buy our beans until the South American crop comes in but after that they are going to be looking hard down south. With acres up, it all comes down to what type of production season they have in producing beans. If its good, beans are going to trend lower and if it’s bad, the market could explode. I know the thought of $12 plus beans is exciting but I don’t believe, as a producer in this time period of significant uncertainty about the health of the U.S. and the global economy, one should take all the risk. Instead the basic concept of being open on the cash but putting a $2 floor under the market and obligating a sell if the market rally above $12 is still preferred. If the market does go from $10 to $12, a gain in the cash of $2 is made minus basis adjustment.
As for those speculators out there who always like being long beans I would challenge you with this thought. If you want to be a bull to beans because of inflation why not go directly to the commodities that will be bullish like gold and crude oil, rather than buy beans? Be a bean hedger and speculate on inflation in outside commodities.
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.
If you need any help in implementing a speculative or hedging strategy give us a call at 1-800-832-1488 or email me at utterback@utterbackmarketing.com
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.
Friday, November 06, 2009 2:13 PM by: Anonymous
Weather pretty clear for the next 10 days - only 1 day with a 30% chance of rain, rest all clear. Past week has been really nice, one day we had a very light shower. Should boost harvest.
Friday, November 06, 2009 10:53 AM by: Anonymous
I HAVE GONE BACK TO TRADING STOCKS A LEAST THAT MARKET MAKES SENSE. THE PRICE OF GRAINS IS A GUESS ANYMORE.
THIS IS FROM A 7 YEAR CORN TRADER.
Friday, November 06, 2009 12:46 AM by: Anonymous
the last few posts are from a person that is all mouth and no brains.it must suck to be u......lol
Thursday, November 05, 2009 8:35 PM by: Anonymous
Grain farmers are underworked crybabies.
Thursday, November 05, 2009 8:23 PM by: Anonymous
SHHH! They are harvesting. Can't you tell, the posts complaining about Bob has fallen greatly.
Thursday, November 05, 2009 6:32 PM by: Anonymous
all you grain farmers are gangster crooks.
Thursday, November 05, 2009 8:05 AM by: Anonymous
Darrel's gonna kick your ass.
Wednesday, November 04, 2009 11:51 PM by: Anonymous
Hi, my name is darrell,i have all the answers.
Wednesday, November 04, 2009 10:43 PM by: Anonymous
sounds like ol` darrell has all the answers........bet he doesn`t have any money though.......hehe
Wednesday, November 04, 2009 9:14 PM by: Anonymous
Darrell, since your such a good trader, how much did you make by selling corn and soybeans off of those technicals? Do you have a fund I can invest in? How much are you up for the year?
Wednesday, November 04, 2009 9:08 PM by: Anonymous
What does "the crop is huge and everyone knows it mean?"
Does it mean yield is greater than 2004? Or that total production is greater than 2007?
Wednesday, November 04, 2009 8:53 PM by: Anonymous
Darrell, since your such a good trader, how much did you make by selling corn and soybeans off of those technicals? Do you have a fund I can invest in? How much are you up for the year?
Wednesday, November 04, 2009 6:13 PM by: Darrell Mueth
Bob, has trading the markets been for the faint of heart in the past three years? I don't know what you are trading on but if you look at a November soybean chart we had resistance at $10.18. We traded up to $10.18 yesterday and we failed. Obviously the market was going to trade lower today. Yesterday, corn traded up to $3.96 and failed at its resistance level. Bob, here are the facts. The crop is huge and everyone knows it. The quality of the crop is a concern and I don't believe we are able to price it into the market as of now. Combines are rolling all week with warmer temperatures and drier weather. I believe for now we are range bound in the markets which is a no-brainer for anyone. We need a catalyst to take us higher or lower. If you head over to newagtalk.com, we might be able to help you with your marketing strategies.
