Issue Date: December 11, 2009
Marketing Your Corn - 2009 Part V
For those following the marketing advice in my series of corn articles, sales for the 2009 corn crop had reached 50% at an average price of $4.29 basis the Dec-09 futures, as of my last article in early Oct-09. At that time, I had also recommended that producers sell another 10% of your production if Dec-09 futures reached $3.75 and another 15% if Dec-09 futures reached $3.95. Both of these targets have been reached bringing cumulative sales to 75% with an average price of $4.15 basis the Dec-09 contract. Since Dec-09 futures are now in delivery, most of my clients have rolled their hedges forward to the Mch-10 contract. These hedges were rolled at a premium of between $.15 - $.16 over the Dec-09 futures. For simplicity we’ll assume the hedges were moved to Mch-10 futures at a $.15 premium bringing the average hedge price to $4.30 basis the Mch-10 futures. At this point I think it would be a good time to reexamine the fundamental factors which are driving corn prices and to review our marketing plan going forward.
By Mark Soderberg
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How Do You Know When The Economic Recovery Really Begins?
It is when real oil demand growth appears. Not just artificial demand growth being propped up with smoke and mirrors but demand growth that comes with solid economic activity and global growth. Growth that hopefully will be ignited by the low prices that will come when we start to remove the life supports to the economic system and global currency exchange rates start to normalize. Oil demand growth will be the thermometer that will take the economy’s temperature and tell us that we are indeed getting healthy.
Believe it or not these are some of the same sentiments that are being expressed by the International Energy Agency. Well at least partly. Today the advisor to 24 consuming nations said while increasing its oil consumption forecast globally by 1.5 million barrels per day to 86.3 million barrels, demand from major consumers may herald an economic recovery. Of course while I agree that things are getting better I still wonder whether this oil demand growth is solid enough to grow on its own. Can it continue to grow without the massive stimulus and will it continue when demand goes away?
By Phil Flynn
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Technically Speaking - What Should We Expect in the Live Cattle Market?
The bearish fundamentals have their grip on the live cattle market. Given the recent action in the cash steer market, the wholesale beef market and the live cattle futures market, I don’t think you’ll get much of an argument that the beef fundamentals are bearish. However, live cattle many times can/will put in a spike low. It appears like this may be the early phase of such a situation. Below is a brief discussion of what to expect during this spike low.
Weekly chart support comes in at 7920 on the continuation chart. The December contract is threatening to close below this weekly support on Friday, December 11th. If it does, the downside target on the weekly chart would be a test of 7365-7400. These are the lows established on the weekly in April of 2006.
By Dennis Smith
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