The temperature is so cold that the geezers are coming out of the woodwork to tell geezer stories about how this is nothing. I remember when it was so cold that…
You know it is cold when the propane prices are blamed on the farmers for using so much to dry a wet crop last fall. I heard that one a couple of days ago. Funny, I thought propane prices were high because of a month of global warming, ah, climate change, that had us shivering in our boots.
Maybe I should not have built this big house. It is nice commuting about 30 feet to the only grain office I know that has a pool table and a foosball table, but the three furnaces that ran all night are scaring me a little.
Later today I have to put on the Carhartts to check the tank gauge and make sure the propane delivery is keeping up. Squeeze reminded me this morning that it has been colder here, a lot of times. It was -14 or something this morning, (if I were a real man and did chores that involved more than opening the garage door enough to let the Lab out, I would know), but we had that just last week, too.
I remember three days in the -20s in the last 40 years we have lived in this house. I also remember the night the peach trees died. The Northern Spy apple tree died this summer when it got so full that it fell over. Too much of a good thing. A wood pile and 10 bushels of rotting apples remain, which is a good thing for me if the propane runs out — we still have one real fireplace in the old part of the house to go with the propane-fired one in the new living room.
Back to markets
I wish I could relate this cold weather to a rise in grain prices, but that doesn’t seem to be happening. The corn furnaces that populate the back yards around here are not universal enough to create demand. One of our corn users is screaming for corn now that trucks are not starting and farmers don’t want to thaw out the equipment to load corn, but the screams don’t seem to be helping prices.
Corn has gotten back toward the top of the trading range it has been in for the last two months, but that is about it.
What does the top of the trading range get us? Corn on the farm is still below the magic $4, and if it gets there, the farmers will be wanting 4.25 or 4.50.
The recent March futures high was 4.351⁄2 on Jan. 13th. We were a nickel higher than that a month earlier.
Back on the tenth we traded down to the contract low of 4.061⁄4 before the Inventory Report surprised us with a smaller crop. That caused the market to hit 4.33 the same day, then hit that 4.33 high the following Monday. There was no follow-through, and we are trading 4.31 this morning.
Soybean futures had a delayed surge after the USDA reports, hitting a March futures high of 13.301⁄2 on the 16th. This came as the traders started worrying about the old crop supply being too tight for the summer usage. Then, they shifted gears to worry about the size of the South American crop, and prices went back down.
We touched a low of 12.631⁄2 on the 24th, down 57 cents from the high. This is a significant correction. Now we have bounced, trading 12.85-3⁄4, which is down 2 cents this Tuesday morning.
Harvest has actually hit the northern parts of Brazil, those close to the equator. We will have continuing harvest there now for six weeks, and it will provide a reason for soybeans to languish, unless there is a glitch. We have gone from worrying that dry weather was hurting yields to seeing comments that the dry weather was helping harvest.
With the cold weather comes the knee-jerk reaction that it will hurt the wheat crop. Large areas of the Plains are said to not have enough snow cover to protect the crop.
Of course, this is what is always said, so I remain a skeptic. Yes, we will lose some of the crop. Yes, we almost always lose some of the crop.
Any bounce on this worry is probably a selling opportunity for any old crop wheat. The wheat chart still looks ugly, with a 5.60 low a few days ago. The 4 cents we are up this morning does not exactly stop the slide caused by good worldwide supplies.