Prices struggling higher on the CBOT

grain bins
(Farm and Dairy file photo)

Slowly, imperceptibly, prices are struggling higher on the Chicago Board of Trade.

There has been no big day, no real excitement, no surprise when the screen has been turned on.

Rather, we gain a little here and there and when we look at the charts, we realize that there has been some real action.

Markets have been led higher by the soybeans, even though this is the time of year when we are normally defensive because we are in the middle of the South American harvest.

It is hard to explain why this is, so maybe I will just report, not try to reason out the background.

Growing influence

We have been defensive about the Southern Hemisphere crop because it seems to be growing.

Earlier we were warned there were so many acres that the crop would be a record even though we were expecting poor yields. Now, the yields are reported to be good and the crop is even bigger.

All this should have meant a return to lower prices, but we have slipped steadily higher, broken resistance, and headed for prices near the highs after harvest.

Previously, we were looking at prices trying to break the $8.90 level of May futures, as a line of resistance. We had poked at that line four times without going through it.

Well, then we did go through it, and we have traded above $8.90 for eight sessions now.

In the process, we have made highs right at the $9.05 line for four days including today, March 22. This morning, we are trading at $9.05 1/2, up three and a half-cents for the day.

This is the highest price since Dec. 7 when we made a high at $9.13 3/4, then crashed to $8.91 3/4 the same day.

Looking ahead

Similar action is seen in the November futures. Our advisers at marketing meetings in Ashland this winter told us to sell above $9 November futures. We have now had eight days we could have done that.

We are currently at $9.17 1/4, up three and three-quarters cents. We are just below the high made also on Dec. 7, this one at $9.26 1/2.

The conclusion is simple. It is past time to clean up all old beans and sell some new crop. It is time to be glad for prices this high, and not to anticipate beans in the teens.

Corn prices. The corn prices are following the bean prices, and nice gains have been made there, too. We have climbed off the contract low in May futures at $3.54 1/2 made March 3.

This morning, we are at $3.70. We have spent five days in the vicinity of $3.70, with one day at $3.72. The last seven days have been mostly sideways, but that is the best we could do, even with higher bean prices.

Selling point

That makes we think this is time to sell. We have been cheaper the last three cycle highs, and this is probably another one.

More will be known when USDA releases the March 31 Planting Intentions Report.

Right now, we are looking at high carryout for corn and beans, and cheap prices. I favor sales before the report, and hope that prices are better after. The reality is, barring surprises, higher prices only come with crop problems, which is not a blessing.

The December new crops chart is similar to the old crop, except that when we made the recent high of $3.90 on the 17th, we were just about to the February high.

That is a stronger sell signal than the old crop. Note that new crop futures are higher than the old.

This is strange, with a big crop expected to be grown. At some point, the two crop prices will converge, and that is likely to happen at the expense of the new crop.

Wheat prices have been lower the last three days, but are showing reason to rebound. After temperatures had warmed and wheat was growing, many areas of the Plains have temperatures forecast in the 20s.

It remains to be seen what damage this will cause. Wheat is tough, but winterkill is a reality at some point.


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