The middle of March is a hard time to plan grain marketing. We are in the dark about actual planting plans, spring weather, and the results of the winter weather we are now experiencing. We watch our charts and stir our chicken entrails and study our tea leaves.
A little more than two weeks from now, we will have the USDA Planting Intentions Report to dissect. It makes a lot of difference how many acres of what we plant, and it makes more difference to the market if the USDA guess is different from the trader guesses ahead of the report.
We focus on winter weather this time of year, wondering if we can get enough snow to recharge droughty Western Corn Belt soils and Plains wheat land.
We study South American weather, frankly hoping that they stumble, even if they are our agronomic brothers. We would rather have trouble there than two states over with brothers we care more about.
And, what are the current results of our efforts?
The winter wheat crop seems to be OK if you look at current charts. Chicago wheat futures have declined regularly and sharply since the high clear back in early November when May futures touched 9.33 1/2.
We got as low as 6.84 a few days ago, and there has been no real break in the decline. We have bounced a little off that low, and are now trading just above 7.00 on Tuesday morning.
It is this time of year that we usually “kill off” the wheat crop, whether we need to or not.
We see talk of blizzards and sub-zero temperatures on bare ground that will surely damage yields and cause abandonment of some acres.
Lost in the abandonment talk is the fact that we almost always lose some acres in a area that always has problems somewhere. Except, I have not seen a single article talking about problems this winter.
Instead, we have had a mild winter, and have focused more on the fact that a mild winter does not provide snow to recharge dry soils. Drought has been the issue, but last weekend we got rain in the Plains.
Seems like the bounce in wheat may be only technical. The only bullish fundamental news out there for wheat is that Saskatchewan (try spelling that without checking) has had twice as much snow as usual, and that could lead to planting delays of the spring wheat crop.
South American weather was thought to be getting better, but the Argentine rain came mostly where they don’t grow the grain. So, we are still watching the corn crop there.
Here at home, the May corn futures have shown signs of life the last three days. After six weeks of general decline, prices turned higher.
We are trading 7.1 this morning, up off the Feb. 25 low of 6.80 3/4 and the most recent low of 6.82 on the 7th. This comes after a decline of 66 3/4 cents.
Soybeans have been more positive. There, we may be bumping against some resistance, and we have been up for 10 days.
We have seen volatility, but have gained from the low of 13.93 1/2 may futures on February 13th to 14.97 on the 22nd. Then, after a drop to 14.20 1/2 on the 26th we got back to 14.84 3/4 on March 8th. We are trading 14.75 3/4 this Tuesday morning.