Long weekends make traders nervous. Anything can happen. Three days is too long to hold a position for some, so they buy back or sell back Friday, depending upon their position. Then, Tuesday, they get back in.
Consequently, it is common to sell off a bullish market Friday, then buy it again Monday. The sell-off did not work all that well last Friday. We traded lower, then the soybeans came roaring back to lead markets in a recovery. They still finished down for the day, but well off the lows.
Soybeans, which had been 26 cents lower on the November contract, finished down seven cents. The corn finished down eight and three quarters cents.
Reason?
Perhaps the recovery was due to Federal Reserve Chairman Ben Bernanke remarks that contributed to a weak dollar. The weak dollar in the short run helps our soybean prices simply because they are worth more versus the Euro. The beans helped the corn.
Monday markets were closed, so Tuesday the traders came in to buy, and beans were temporarily up 32 cents and corn was up 12. That has not lasted, but we are strong at 9 a.m. Corn is over 8.05 December, and the soybeans are at 17.75.
Friday’s recovery got us back near the all-time highs for the beans. Tuesday’s surge made new highs again. The September soybeans put in a high of 17.94-3/4 this morning. The November got to 17.89. Now the big emotional target has to be $18!
Holding on
Put this down as the latest high you are likely to ever see. That would be until next week, maybe. This market keeps confounding analysts by holding on into harvest. The traders seem determined to actually have harvest results before they give up on prices.
Normally I would be relating price moves to the USDA weekly reports on harvest progress and condition. Those reports are delayed until Tuesday afternoon by the holiday, so we are running blind. It does not matter too much. What the market is waiting for are harvest results from the major states, and those are still in the future.
Early fall
That future is closer than usual. I was chopping leaves with my mower Saturday, and the first days of September are looking like the last week of September around here. Some fields of beans are now entirely yellow, with leaf drop in spots.
The dairymen are well into the corn silage harvest, and I don’t remember ever seeing corn chopped in August before. The conditions are perfect, and the ruts will be non-existent this year.
So, your marketing plan has not changed. Yes, we make new highs, but not by much, and not in the corn. Sell, sell, sell.
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