Maybe this is the week. Finally. Is it too much to ask?
Maybe this is the week of the big thaw. Yesterday I saw a patch of gravel in my driveway for the first time since the end of December. Last week I finally got my 1989 Mercury dug out of the snow bank it has been in since the first of the year.
The battery ran down and froze, and the re-frozen chunk of snow on the hood was 16 inches thick, so I couldn’t hook up my dry cell battery without taking an axe to the hood. I resisted. It was a good winter to telecommute.
A few years ago I took the big step and quit going to the office in town and went to the office down the hall. I felt a little isolated, but Squeeze quit calling to Andover to see if I was ever coming home for supper.
Now she just calls upstairs. The winter is beautiful, and when it is 12 below with hoarfrost, I get out my camera instead of my arctic wear and my snow brush. More importantly, maybe this is the week for the big thaw in grain prices.
Pretty, pretty, please? Every time we see a piece of fundamental news coming, we can hope.
It has been a slow winter in the grain business.
None of the farmers are hungry enough to move any amount of cheap corn and beans. The contracts are filled. In some cases a few loads have been taken out to keep the bins fresh, but there has been no big movement of bushels to town.
Reports to come
Now comes the USDA Supply and Demand report and the first Crop Production report. They are out at noon eastern time today (Tuesday), and we can hope that they means something. They are all we have to hang the market on until the March 31 Planting Intentions report.
So far the thinking is that the Supply and Demand report will be a non-event. Some traders are looking for reductions in the carryout numbers for corn and beans because recent export numbers have been so good.
For example, yesterday the Ag Attache to China estimated that the Chinese will import 73 million metric tonnes of beans this year and 77.5 mmt next year. Both would be records.
The Crop Production report could have some news. It will give us the first hint of acres, before the actual Planting Intentions report. We anticipate several million acres less corn planting, with more beans.
We have no clue what is really in the market right now. That is … what planted acres are the traders basing prices on?
It is carryout that is driving the market and limiting prices.
We have a big pile of grain in this country, although arguably we have a little less in Eastern Ohio than the last two big years.
The problem is, we may not know what cheap prices are. The No. 1 rule of the grain futures markets is simple. The market is always right.
This means that, no matter what your prejudices or your needs, the price that is trading is the best guess of people with real money on the line of what the current and future values of grain are. Consequently, the farmer view that prices “have to get better” is, by definition, wr., wr., wrong.
Hard to take, but the truth. Prices may, in fact, get better.
They may, in fact, do nothing. They may, in fact, get cheaper.
They do not “have” to do anything. “Have to” is the refuge of stubborn minds.
Some refused to sell any new crop when prices were higher last year. Some wish they had sold more.
All have no ability to wish prices higher. We are in a woulda, coulda market, and we are hanging on to any scrap of hope before we make a new plan. The old plan was to do nothing and wait for better prices.
So far that has not worked out very well. There have been thrills here and there.
Prices have not been static. We see big moves, then we see corrections.
We paid big money for the inputs to raise grain, then got 2007 prices with 2014 costs. May corn futures are trading down one-and-a-half cents this morning (March 10) at $3.87-1/4.
This puts them in the middle of the recent range defined by the low Feb. 25 at $3.79-1/2 and the recent high two days later at $3.96-1/4.
We had several excursions close to $4 for February.
May soybean futures are currently down more than four cents, at $9.89. We have seen a big swing of nearly 90 cents in prices between the $9.61-3/4 at the end of January to the recent high on the second of March at $10.39.
We were back to a new recent low of $9.76-3/4 on March 6. May wheat futures have also swung almost 70 cents.
This morning we are down six, at $4.84. We had a high of $5.45 the middle of February and a low of $4.78-1/4 on March 6.
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