Volatility continues in grain markets

If there is one thing to talk about in the grain markets, it is volatility.

Grains have traded over wide ranges in short periods of time, even when we had to hunt for a reason for prices to change. Blame it on the stock markets, blame it on USDA reports, blame it on the phase of the moon. Prices have moved around.

Lately, the trend has been sharply higher, and the long weekend helped that trend in the corn markets. March Chicago corn futures gained 7 cents in the Sunday-Monday overnight trading. That is only part of the story, however.

Friday to Monday morning, we have had a 42-cent range. Friday, the market did not know how to lean over the long weekend, and was very weak for awhile. It ended on a positive note and has continued that.

Now and then

March futures before the open Monday are at 4.07, after a foray in early December to 3.05-1/2. That is pretty sick after a June high over $8 on the March, but that was then and this is now.

Then, we wondered where all the ethanol corn would come from. Now, we wonder where the financing comes from to keep the ethanol plants open.

Then, the farmers were lining up to contract with the ethanol plants. Now, the farmers are calling local elevators to use them as the middlemen to the ethanol plants so they know they get paid.

So, it is a different ball game now, and we are trying to find direction from here.

Holding on

Just when we thought the lows were in, the USDA reports last week gave us reason for low prices again. The good news is, that we dipped, but the old lows are still a long way away.

Higher crop production numbers contributed to a limit-down move, but now we have digested the news. If bad news cannot make the market go down more than that, then the December 5 or so lows have held.

The rebound on corn is two-thirds or so of the recent dip. The recent high was 4.27, and that does not seem so far away when we are at 4.07 instead of the 3.58 of last week.

Now, we are not so far away from the most critical news of the year, which is the Planting Intentions Report of March 31.

After that we can worry about weather.