I was reminded this morning that when it comes to really knowing what is going on in the grain markets, I am as useless as certain vestigial mammary organs on a male swine. Maybe you have to think about that for a moment. I cleaned it up a little for the “General” audience.
In fact, at various times in my life certain companions have suggested that I am a male swine, but that is another story.
Perhaps I thought this as I studied charts getting ready to write this, and noticed that I was long a little corn and short a little beans at just the time that corn was going down and beans were going up. Surely, if I knew what I were talking about, I would just sit here and play the market and get rich and work for myself.
In fact, I tend to be one of the most disciplined cash traders I know. I try to stay even the market, not betting on price movement but on my judgment of basis improvement. My judgment fails me now and then, but my price guessing is nearly flawlessly wrong. Put money on the table, and my nerves sue for peace. Peace to me is staying even.
My new quote system includes a voice service that has people in Chicago breaking in whenever they please to tell me what they know about what is going on in the markets. I am starting to think that they have to do this on some schedule whether they really know anything or not. I only have to do that once a week, and I don’t interrupt Laura Ingraham and Bill Bennett to do it. That is what is playing on my computer until the experts break in.
It is a hard life being an expert. You have to have an opinion for why the market is doing what it is doing, a prediction for what it is going to do, and an explanation for why your previous opinion is not working out right now. Occasionally you get to brag about being right.
When reasoning about the grain markets is not working, you blame it on outside markets. This is what I have been doing for a month, while Greece, and then Spain, and then Portugal have been melting down their economic reputations. This has hurt the euro, helped the dollar, hurt exports, and given us all a reason for grain prices to go down when we thought they should not.
Now, just when I am tired of that argument, and tired that it is correct, things change. It is bad enough that our own economy is crummy. We get tired of having grain prices be at the mercy of every whim of every country.
Why does this thing about being a world economy seem to impact on agriculture the most? Where is Earl Butts when you really need him? (He preached that we should plant fencerow to fencerow because we could not keep up with worldwide demand.
Then we did, and found out that the world was hungry, but the hungry did not have money to buy our grain, which there was now too much of. Then came the 80’s, when we traded in the Earl Butts farmers for younger, smarter ones who bought our equipment at penny auctions. Maybe that was just me…)
So, this week we traded grain on grain fundamentals for a change. At least that is what we said when the week was over. Soybeans were higher, and they should have been. There is some idea that all the acres are never going to be planted, and USDA tells us that the exports are for the year 21 percent ahead of last year and 7 percent ahead of projections for this year. The Delta beans are starting to burn up.
Corn gained over 30 cents before an eight-cent fall back Monday. Maybe this was a backlash to talking about Europe too long. Maybe it was just too much rain. You know there is too much rain when analysts keep saying, “It is not like 1993!” Well, I hope nothing is ever again like ’93, when the Big Muddy got ten miles wide here and there. It is wet enough to hurt the crop, though, and severe storms are supposed to be widespread this week.
Wheat futures have perked up for ten days, which is by definition a contra-seasonal rally. It is harvest, and harvest is slowed by rain. Test weights are going down on the hard crop. The soft crop is getting ready for harvest, and we are starting to worry about that quality. Wheat was invented by God for dry regions, and Ohio is not one of them.
Maybe trading outside markets was more fun.