During a USDA report week last week the grain futures market was volatile as expected, but ended Friday with strong day for prices in the corn market. Analyst Bob Utterback from near Lafayette said the market support came, in part, from actual yields being reported now that harvest is in full gear.
“Guys are starting to get in the fields and they’re seeing that the crop generally is their worst case expectation realized in central Indiana, Illinois, Ohio area,” he told HAT. “Now the only areas that are reporting good yield performance are Minnesota, North Dakota, and parts of northern Iowa where the yields are at or a little above expectation. But I think the end user now is getting worried that this is for real and he’s wanting to get control. So I would suspect the end users are now responsible for a lot of this buying.”
The marketing business is very tricky this year with drought impacting yields, although it’s not yet fully known to what extent. Utterback says the key is for each farmer to sit down and determine what he wants to get from the markets.
“You’ve got to control your greed and get a plan of attack for 2013, and say ok I know with $7 corn and $14 beans I can make “X” return on investment. I know I can’t outguess Chicago because if I was that good why should I even farm? But I’m in the business to produce corn and beans so I would argue you need to get a game plan on what are you going to do if corn gives you $7, what are you going to do to maintain flexibility, and work a process. Don’t get yourself trying to get in the game of trying to beat Chicago at its own game because you’re not going to win long term.”
Utterback suggests a game plan that stays consistent from one year to the next, and he added, “Now is the time to take advantage. There’s only one thing I really know for sure. The best cure for high prices is high prices, and long term short crops have long tails. They ration usage to stimulate production.”
Listen to Utterback’s comments in the noon hour last Friday:[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/09/Bob-Utterback-9-14-commentary.mp3|titles=Bob Utterback 9-14 commentary]