The rain on the Plains falls mostly on the grain prices. (I couldn’t resist. Well, I could, but I didn’t). It had to happen someday. We have stayed in this cautious rally, mostly in soybeans, but partly in corn, for an extended period.
The biggest driving factor was the dry conditions in Argentina, although wet conditions in Brazil contributed, especially to corn prices. Dryness in our Great Plains was driving interest in wheat prices. Reality was that several things could happen to end the party. The South American harvest would finish and be better than expected.
The USDA Planting Intentions Report would show an increase of bean acres. The traders would reverse positions just as an “exhaustion” top to the market. It remains to be seen if the American rain results in a situation like the one in the old Frank and Earnest cartoon.
Frank is a grocer explaining, “It’s the law of supply and demand, ma’am. Wheat goes up, bread goes up. Wheat goes down, bread stays up!” Production problems in the Great Plains means less bread wheat, but doesn’t affect our cookie wheat supply.
It does affect our price, as there is sympathy between the Chicago, Kansas City, and Minneapolis (hard red spring) wheat markets. Prices crashed Monday, March 19, on the Chicago Board of Trade with the weight of rains in Argentina, with more rain expected, and with rains in the Great Plains of America to help our hard red winter wheat crop.
May corn futures lost almost eight cents on the day, adding to previous losses the preceding four sessions. At the low Monday and overnight Tuesday morning, we traded 3.74-3⁄4, 21 cents below the high of 3.95-1⁄4 on March 13.
May Soybean futures traded 10.21-3⁄4 Monday, a low that was almost 61 cents off the March 2 high of 10.82-1⁄2. We lost a crushing 27 cents of that Monday.
The November new crop futures lost over 18 cents, trading a low of 10.21-1⁄2 overnight going into Tuesday. July Chicago wheat futures have now lost over 65 cents from the high of 5.31-3⁄4 posted March 2.
Fears of a reduced hard red crop have been receding with the increase of rain. Spring will be here before you read this. The vernal equinox arrives in Ohio just after noon on Tuesday.
This means the sun did not set on Windsor Road by me last night, but it was close. Tonight it will look like it sets in the middle of the road, but it will be a little to the north.
The sun is on its way back north, and today marks the exact middle of its progress from the depths of winter to the start of fall. Days are getting longer, and we can sit in the backyard after supper if the hay is done for the day and the corn side dressing is done.
Spring arrives with snow still on the ground at my house, but that is no surprise. The first of the daffodils are sprouting, but more snow is forecast for the Northeast. It is mostly supposed to miss us, as it has all winter. We only plowed the drive twice this winter, and both times it was for Bible Study on Friday nights.
I am getting to old to help push cars out of the yard. The March 31 Planting Intentions Report will be on the 29th this year, as the 31st comes on Saturday. Once I would have anticipated some market-shaking news from the report.
Now, I am not so sure. With the current breaks in the market, and negative news may already be “in” the market. The expected one million-acre increase in soybean plantings is surely already expected, and already reflected in the current plunge.
It remains to be seen what other results we see.