Maybe you can’t hear clearly, but if you shut off all machinery and stop the conversations within a few feet, it is possible. It is the sound of the fat lady singing. It sure feels tonight like the big rally of 2012 that left us thunderstruck with record corn and soybean prices is over.
We will know for sure in a few days, but this is what it feels like when the top is in. This is what it feels like when you really wish you were short instead of long, when you wish you had sold it all instead of just a little.
This is the day you get that aching itch to kick yourself or try to find excuses for why you were right all along, even if it feels really wrong right now. I can anticipate the excuses that are coming.
“I didn’t know if I would get a crop.”
“How could I sell the rest of the old crop if the new crop looked so bad?”
“I thought maybe I would only get 50 bpa, and so I sold half of that.”
“You told me we were at the top two weeks ago, so obviously you don’t know anything!”
As I write this after 9 p.m. July 23, the all-time highs are in on corn and soybeans. There was a head-fake July 19 that made new highs, but after some profit taking, there were new highs again after the market opened at 6 p.m. July 19.
September Chicago corn futures hit 8.28 3/4. During the day July 19, the high was 8.16 3/4, up from the 7.99 3/4 high of four years ago.
During the July 22-July 23 trading, however, September corn was off over 20 cents, to 8.04 1/4. The low was 9 cents below that.
December corn futures had a similar adventure. July 19 showed a high of 7.99, but the high July 20 was 2 cents lower. July 23 we touched 8.00, the magic number this year. We are now 30 cents below that.
The soybean side is actually worse. The last few days the market has really been a bean rally, with the corn going along for the ride. The thinking seems to have been that the corn damage was already in the market, but it is the weather in August that kills the beans.
So, the soybeans made the high in the nearby August contract July 20 at 17.77 3/4.
The November futures actually had two days virtually the same. July 20 we hit 16.91, then July 23 we were 16.91 1/ 2. The crash came July 23, with November futures closing down 68 1/4 cents at 16.18, and putting in a low at 16.16 1/4.
Three hours into the July 23 night session we were down another 48 3/4 cents to 15.73 1/2. That is roughly $1.20 in a little more than a day.
What caused the change? There were multiple factors, but the biggest may be just that we made new all-time highs. When we did that to corn a few days ago we immediately put in a key reversal on the chart, a huge signal.
The weather stayed dry, so the fundamentalists ignored the chart and went back up briefly.
In beans, I look for no short reprieve. The weight of the high prices has the market looking for sellers and getting them with a little rain here and there. Add in a 10-day forecast that holds out hope for more rain and lower temperatures, and you can hear the fat lady sing all the way to LaSalle Street in Chicago.
Our job now is to remember that today’s prices are still high and sell, sell, sell. If you were waiting for a sign, you just got it.