In my grandmother Faragher’s Manx household was the tradition of the “Qualtagh.”
The qualtagh, the first visitor to your home in the New Year, was a harbinger of the household fortunes for the year. A young, vigorous man was as good as it gets. A crusty, broken down old farmer meant you should dig a hole and hide in it.
Maybe Monday’s market was a fortunate qualtagh for the farming community.
Prices opened sharply higher after being disappointing the last few days. They did not hold the gains, but closed with nice gains, so maybe we could see some follow-through.
The corn qualtagh was a gain over 12 cents in early trading, though we only held onto 4 cents at the close. The soybeans were up nearly a dime, although late trading trimmed off the 16 cents above that.
So, we actually held a third of the gains, but I will take it. It is a nice start for the year, and by the time the reader digests this, we will know if we have a trend or not.
Sadly, the technician in me sees a chart that is confirming a return to the tops, not a bull move. We need to break through the Monday highs to start a trend.
Look at March corn futures, where the high was 4.26 1/4. That fits on a line with the last major high, 4.25 on Nov. 18, and the high before that at 4.24 1/2. The best that I can say is that the market was watching that line carefully and sold off when it touched it.
It is positive that the line is slightly uptrending, but the up is so slight that you have to be kidding yourself.
No, what we have now is a line of overhead resistance, a price that will be hard to break through. The timing would be right for that break-through to be on Jan. 11, when we get the USDA January Inventory Report. Put that date on your calendar.
To get a breakthrough, we need a surprise crop size. We need the crop to be cut to less than expected. This would, however, buck the trend USDA exhibits wherein a big crop keeps getting bigger. That is, USDA raises the estimates of crop size month by month until the January Report.
A surprise would be that there were harvest losses and/or lower test weights that affected final yield. Based on our part of the world this is unlikely, but the Chicago boys are not too impressed by what happens here.
The soybeans do not have as strong a chart. There the Monday high fits on a declining line of overhead resistance. This is defined by the Monday 10.65 1/2, the 10.69 1/2 on the 16th, and the 10.78 1/2 on Dec. 1.
Once again the betting would be that we need a surprise in the January Crop Production Report.
Ignored for a long time of harvest has been the wheat. March hit 5.61 1/2, then backed off 3 1/2 cents. The close reflected a gain of over 16 cents however. The wheat took the gain and held it.