In NASCAR the so-called “silly season” is that period at the end of the year when teams are realigning. Drivers are going to other teams, teams are changing leadership or swapping drivers. People are hired, fired.
Everyone knows this next year is the year. Just ask the Cubs or, for that matter, the Indians.
In the grain markets, the silly season tends to come in last half of December. Traders take time off before or after Christmas and New Year’s holidays.
Commercial hedging can be heavy just before or just after the first of the year, depending upon the bent of the farmer who may need to sell or to hold grain for tax purposes.
The heavy or light hedging may distort the market direction. Trading gets a little weird just because everybody may not be on the floor, and the market does not have the same liquidity.
Or, maybe I am just looking for a reason or a lack of reason for recent market activity. Prices were sharply higher Monday on the Chicago Board of Trade, after the Christmas break.
March corn futures closed up 7 1/2 cents at 4.16. They actually hit this price and went through it right after the open, then traded lower than that most of the day before a strong close.
January soybeans on the board finished up nearly 30 cents, but were just barely positive in the middle of the session.
March Chicago wheat futures were up over 26 cents, but only up 6 cents for the middle of the day.
Most interesting is not the Monday trading, but the last few days. All three grains have made significant gains in the silly season, and we are now hoping that we don’t give them back away when the boys all come back to town.
March corn futures had a Dec. 18 low of 3.91, then made the high Monday at 4.18 3/4. That is almost a 28-cent gain. January beans have gone from 9.84 1/2 on the 22nd to 10.34 on Monday, up 50 cents.
March wheat has gained 35 cents since the 17th. That doesn’t seem so silly, if we can hold on.
So, we ended Monday poised for a big Tuesday, right? Wrong, corn bread breath.
Corn futures on the overnight going into the Tuesday session are unchanged, the beans are down six and a half cents, and the wheat is off a nickel.
With Christmas on a Friday, we are trading more like a three- or four-day weekend. Anything can happen today, and the rest of the week.
Nothing means anything until after the first of the year. Well unless you are one of the farmers who sold me corn with the price up 8 cents yesterday. Then, it means something.
And, that is where we are — staking out lines in the sand, saying, maybe I can sell something here. Maybe I should worry that prices get cheaper. Maybe I should listen to the talk that South America is going to plant more beans than ever before. They should, based on the dollar price of soybeans, so where is the surprise?
Maybe, heaven forbid, the dollar price of soybeans is not so important anymore, like the Arab countries that want to trade oil in Euros. Our currency has gotten so cheap that we are starting to forget that the Euro started out as the European dollar.
It was the new currency of the new EEC, formerly the Common Market. It started out at par with our dollar, but now it is worth so very much more.
Maybe we have forgotten when we could just trade grain and not worry about things like the value of the dollar.