The corn downtrend has continued for 11 days. There is a little satisfaction in that, since in my last column I said that would be the expected trend. I would rather have been wrong, since I need some corn.
Last week, we looked at the long-term seasonal trends and determined that normally we would have a rebound high in early August. We did, just a little late.
Now we seem headed toward the harvest low, which can come before harvest or in the middle of it.
The timing of the harvest low depends upon what surprises the combines reveal. We are poised to believe in big yields, as the weather has been nearly perfect for a couple of months, as long as you have not been making hay.
It is always scary when there is nothing to complain about.
The early beans, however, have been disappointing. There is talk of early bean harvest n Ohio of only 35 bushels per acre. So far that means nothing, but it is something to think about.
Soybeans have always confounded me. They can be chest high with poor pod set or 18 inches high and loaded. Consequently, roadside surveys mean less in beans than in any common crop.
If the corn yield expectations hold up, we have a record crop and the market knows it early. I would expect the low to be before harvest is in full swing, or just after the first 15 percent proves the big yields.
If there is any disappointment, the low could go fast and the rebound will come while the combines have a long way to go.
Looking at the numbers, the December futures high was July 30 at 6.24 3/4. We dropped to 5.04 1/2 on Aug. 12, then rebounded to 6.25 on Aug. 21 and 6.28 3/4 on Aug. 25.
After that confirmation of the high, we have dropped for 11 trading sessions, and are down another dime overnight Monday/Tuesday. December futures hit 5.35 1/4 last night, which is 93 1/2 cents off the recent high. Yuck!
We can expect the harvest low to be below the recent low, near $5. That low was 9 cents below the last major low, March 24. With that in mind, the amateur technician in me sees a trend of lower lows, wide harvest basis, and an elevator price below $4.
The bad news is, we had a tick short of $8 December futures at the high, and no cash buyers wanting to book ahead. The good news is, we are still a long way from the $2 and below we were used to at harvest, but the production costs have soared.
In the other commodities, soybeans have continued the downtrend, also. After a triple high in late August around $13.70, we traded as low as 11.61 last night. That trade just ticked through the Aug. 11 low of 11.68, and the next stop is the April Fools’ Day low at 10.45 1/4.
Only if the early poor yields are an actual indicator of the crop size are we likely to avoid a low back at those levels, or lower.
I have felt that the bean crop was underestimated, but what do I know? I have not actually been in a bean field in years, and I drive too fast to do any more than admire the height and color.
December wheat futures continue to stair-step lower. The high was 9.92 in late June, then a high at 9.59 1/2 in late August. We hit 7.25 1/4 overnight, and there seems to be little support.
The record prices are gone, but not the loving glances backward at the charts. Now is the time of ugly decisions.
The most important one so far is to find a way to have to sell at harvest basis. The good news there is, it is always a good thing to have too much to store, even if it means elevator basis at harvest.