Bad timing for a weak grain market

Spring is coming to southern Ashtabula County. I know because my stone walks are starting to burn through the snow cover we have had since before Thanksgiving.

Temperatures are supposed to be in the 50s this week, so only the 8-foot loader piles will remain soon.

A couple of weeks ago, the section over the septic tank appeared, but now I can see stones most of the way around the house.

I have a scrawny squirrel in the bird feeder, risking his life with the Lumbering Lab to try to get fattened back up. Last night we saw three different deer families out scratching in bean and corn fields where previously some scattered grain was buried too deeply to find. My ‘possum got married just before winter, and has been gone for the duration. I saw one of his cousins a few days ago, so he will appear soon.

And, the phone is ringing with farmers that want to move corn for spring cash flow.

Poor timing

Last week, I expressed the hope that we could go back up and fill the report gap on the May corn chart. That has not happened.

Now, farmers are facing the need to sell corn for spring cash flow into a weak market that continues lower over the last few days.

May corn left a gap from 4.03 to 3.95-1/4 after the USDA January Inventory Report. Gaps on the corn charts, as I wrote last week, are usually filled. A few days have passed and we are going the wrong way.

After rallying from the low in early February of 3.59 to the March 1 3.92 high, we have broken 21 cents instead of continuing into the gap.

The current break is not good for the timing of early spring sales. It does, however, prime the chart for another run to the gap if there is good news in the March 31st USDA Planting Intentions Report.

I know the reader is tired of hearing about that, but it is the only real, sizable fundamental news we have on the horizon. We need news for higher prices, and we are not getting it.

Soybeans

Soybeans, meanwhile, are arguably stronger in price, but not necessarily in direction. There we have seen a similar early February low, this time at 9.11 on the March chart, and a nearly 75-cent bounce to 9.85 on the 23rd.

From there, we have seen a decline of almost 50 cents.

Like the corn, we are seeing some consolidation the last few days. That is, we are seeing a narrowing of the trading range, with little change in the closing price. That is an indication of a change in direction coming, but it does not indicate which direction. It is a warning to pay attention.

More worries

Besides planting intentions, we have exports to worry about. The corn is too slow for the USDA projections, but the beans are doing OK.

The lower corn prices might help move corn and catch us up. As we always say, the cure for cheap corn is cheap corn.

The reality is that the market continues to concentrate on the record crop. When USDA gave us the record corn crop news in January, they promised a March revision. We will get that next week.

Who knows what that means, except we can hope that they lower the crop a little based on the corn still in the field Jan. 1 not doing so well getting in the bin.

The users have little incentive to push prices to get grain because they know, with the record crop, that the grain is out there. The market is in the hands of the users, and we can’t change that this year.