The last line of that Zombies song from the dark ages of the ’60s is, “It’s the time of the season for loving.”
That’s a good Christmas thought, and better than the one I had this morning, looking at prices. This morning it seems like it is the time of the season for losing money on grain.
We are entering the doldrums of the marketing season. There are few surprises left to bounce prices around.
The harvest is in, and we think we know how much there was raised. The Jan. 11 Inventory Report will confirm our expectations, most likely.
Trading. Traders are just like everybody else this time of year. The focus is on travel and Christmas presents, not on the latest export reports, which are bad anyway.
Traders in Chicago take a lot of time off over the holidays, so trading gets thin, and that frequently means trading gets negative.
Take the last few days, for instance. Yesterday, we bumped up against resistance at 7.35 on March corn futures, then fell lower, closing at 7.24, down almost seven cents. We seem locked in a trading range between 7.15 and 7.35, and are headed back to the bottom.
In early trading Tuesday, we have lost an additional nickel, to 7.18 3/4.
Corn traders Tuesday were looking at the weekly export report from Uncle Sugar. He says that we loaded out 15 million bushels for export this week.
The good news is that the market only expected 10 to 14 million. The bad news is that we need 25 million a week to meet the Supply and Demand predictions.
We are now behind the export pace of last year by 52 percent. As I said last week, the culprit here is high prices. We really don’t want sustained high prices, just a spike in prices that lets us price our crop at the high end of things if our timing is good.
Soybeans are turning south today, although we have been in a short uptrend there. Tuesday we were off 17 cents on the January contract, at 14.79 1/4.
Until that break we had been headed higher, however. The recent low was the middle of November, at 13.72 1/4.
We are still a buck above that, and had been as high as 15.08 3/4 at the high Monday.
The most negative market is Chicago wheat, where we are in a downtrend, not a trading range. The recent high for March Chicago wheat was 8.95 1/2 at the end of November.
The low was 8.01 1/2 just two weeks later. Currently, we are just off that low at 8.04 1/4, down 3 3/4 for Tuesday, so far.
Again, exports can stand the blame. Our 16.4 million bushels was the highest weekly export for seven weeks, but big whoop!
We need 22 million a week to meet the pace predicted by USDA. So, is there any advice to be had? It is hard to swallow, but these are good historical prices for grain, even though the highs have come and gone.
Yes, I hope for a rebound. Yes, I worry that I miss opportunities at good prices as we continue lower. I have more hope for the new crop gaining on the old than I do of the old crop rebounding.
We need huge crops to build up our carryout, which will lower prices. We run the risk of a mediocre crop continuing our higher year-to-year higher price pattern.
In corn, we could raise a 164 bpa crop and actually lower our carryout. It’s the time of the season to plan the sale of the old crop and get targets in to sell the new crop.