Some things you just know. The sun will come up tomorrow.
If you don’t believe me, one of those little red-haired girls is probably still singing it every night on Broadway or somewhere.
My dad’s version was that, “Tomorrow is another day.” He stole it from some movie, but he always made it sound original. It was supposed to console me after a really wretched day.
In the market we always say that, what comes up will go down, and vice versa. Pretty simple — prices don’t stay the same.
The one you don’t always hear, I heard first from son number two, and he is just as right: “The dog always eats the Tootsie Rolls out of the cat pan!” I am not entirely sure if that is good or bad, or how it relates to grain prices, but I thought I would throw it in for free.
It ain’t pretty
Not a pretty picture, and neither is the grain market on the Chicago Board of Trade right now, unless you focus on yesterday.
Yesterday corn prices tried to stage a comeback, and there was follow-through overnight. So, if you are an optimist, like Dad., you focus on the 24 1/2 cents we have bounced off the bottom in a couple of days. You try to get behind you the fact that the market went down 1.39 in three weeks.
Dad always said there are three types of people — optimists, pessimists, and realists. He said no pessimists farm and very few realists do!
I don’t think it is that simple, based on the groaning I hear from time to time, but it is time to be an optimist.
The reasons we had prices near the all-time high seem to have gone away. Now the market is in a different mood.
Now, we have to look at the fact that we have a chance to sell high prices, just not the highest.
The optimist might think we are going to go right back to the highs. I don’t see the demand that can make that happen, although there is still a good chance the corn crop will have a yield under the current assumptions. Give us 140 bpa instead of 148, and prices change dramatically.
Ugly bean prices
Soybeans, meanwhile, dropped 2.26 in a month. Ugly!
The optimist would notice that Monday we made the November futures recent low at 12.39, then bounced to 12.59 3/4. The overnight going into Tuesday has us over 12.74.
That is a great bounce, and gives us some feel that we have put in a bottom at the moment.
The problem with the beans is, are we trading them like a food grain or a world energy commodity? Seems like the prices go down when crude oil goes down, or the Dow goes down, or some world leader throws up all over the U.N. podium. (Figuratively, that is. Don’t hunt for the culprit on Google. There will be no Bush throwing up on the Japanese premier type pictures.)
So, corn and bean prices are high, just not record high. Harvest has started, and we will soon have a better feel for our last-gasp price savior, the yields.
Rampant demand, like in the spring of 2008 that led to record prices, is not in the cards.