Grain trading gets interesting around Christmas time.
Traders may leave town to visit Grandma, and the trading may become “thin.” This is the term we use when there is not as much trading as normal, as can happen when some of the traders are gone. This holiday practice can result in higher or lower prices if there is any mood change and not enough traders to smooth things out.
The number of traders can depend upon the time of the week that Christmas day falls on, and the general level of activity of the market. If things are hot, Grandma may just get a day or so.
There is a weak trend to anticipate higher prices going into Christmas. This year that did not happen, as prices actually fell Friday. Soybeans led the markets lower, with the January down five and a half cents.
Thursday, Dec. 22, we thought we could hold some support at $10 because of large open interest in the $10 put options. That did not happen, and Friday we traded below that all day, closing at 9.90.
With the drop in beans, we traded corn down one and a half cents at the close on the March contract.
The wheat for March was off three and a half.
As this negative tone led us into the long weekend, it was a relief to get to this morning, Tuesday, and have higher prices. So far, this seems to be a reaction to the lower close before the long weekend.
For whatever reason, the March corn futures are up 4 cents to nearly 3.50, the beans are up 12 3/4 to get back over the 10.00 level to 10.01 1/4, and March wheat is up six cents to 3.99 1/2.
It would be nice to see this rebound mean something in terms of a real trend into the New Year. I have had hope for better prices in the New Year, simply because we have been soft as we finish 2016.
On Sunday, Squeeze and I went to Denny’s in Austinburg for Christmas brunch. This happened because we are alone for Christmas until our “outlaws” Christmas on Wednesday. The Amish call this “second Christmas.” Also, this was the closest open restaurant!
I ordered my meal, than looked to my right, realizing that we had sat beside two Austinburg farmers of long acquaintance — Larry Obhof and Brian Forman. They were quick to put the needle to me about the recent merger between the local co-op, Western Reserve, and the co-op farther west, Town and County, that I work for. The merger is effective March 1, which came into the conversation quickly.
“I suppose we can look for grain prices to be 50 cents higher after March first,“ Larry quipped.
I had two reactions. First, they don’t expect much! I hope they aren’t disappointed that the merger does not perform miracles!
What I told them was that I hoped to get a bounce out of the New Year, and that is still where I am today. In the absence of real news, the calendar itself is our only hope right now.
I heard from Larry and Brian what I hear all over these days. Farmers are not happy about prices, but they are grateful for the great crops they produced this year. They are realistic that the big crops caused the cheaper prices, and that we have to work through what is a good problem to have.
The next time I write this the New Year will be here, and with it, hopes for the future.
The immediate future will give us reason to sell the grain that is bulging the bins. I hope that reason is more than just the need to start marketing, because the time for grain movement is at hand.