New name, new job, same old opinions

Corn harvest 2016
Corn harvest in the fall of 2016.

Today marks a big day for the coop system in Northeast Ohio. It is also a big day for me. Today, Tuesday, Feb. 28, is the last day of the month, and the last day for Town and Country Co-op and for Western Reserve Farm Co-op.

Tomorrow, Wednesday, the first of March, is the first day for the merged co-op which will be known as Centerra Co-op. For the readers, the only change will be at the end of this column, where it will now say that I trade grain for Centerra.

For me, it marks the next step, the next job, the next new start, even though my job is not changing much at the moment. Technically for me, this is job No. 7, if you don’t count the writing I do on the side.

I have progressed through those jobs, learning the grain business. It has still been the grain business.

During 47 years of trading grain, I have contributed to the Farm and Dairy for 28 years, contributed stories and columns to local weeklies, and even contributed once to a national aviation magazine.

It has always been the grain that dominated my days, however.

The markets

The excitement within the new company is not being reflected on the Chicago Board of Trade currently. In recent days prices have been sliding after beans returned to worrying about the South American crop size and after the corn futures made new highs, looked around and wondered if there was a good reason for that, and started trading the down side of the cycle again.

Last week, I said we had no real bullishness and that the market was destined to continue to trade the large crop. For the last week, we have been looking again at what the big crop trades like.

It has not been much fun, until today. The farmers got excited a couple weeks ago and set some targets, hoping for a little more bounce. What we got was a turn-around. Yesterday, I told a farmer that it felt like we are just trading cycles, and he should wait for prices to turn back higher.

Well, here it is, Turn-around Tuesday, and prices are sharply higher. I feel smart this morning, but I would feel smarter if I had any idea why prices really are higher!

When the Farm and Dairy called for cash prices this morning to post on the commodities page, we were just modestly higher. That was in the middle of what we call the “biscuit break,” the pause in trading between 8:45 and 9:30 EST.

The traders use that as a breather in the overnight trading. They settle “out trades,” run to the loo, and maybe grab a quick bite. When the break was over this morning, excitement hit the market in the form of a jump in corn prices by over a dime and a soybean gain of over 20 cents.

The Chicago wheat is up almost eight cents. The cycle bottoms are in once again. We are trading cash grain off May futures now. May corn has made lows since the first of December at $3.491⁄4, $3.52, $3.59, $3.63, and $3.671⁄4. The pattern is higher, and the chart is clear.

At the same time, May corn futures hade highs at $3.69, $3.773⁄4, and the real top at $3.871⁄4 in the middle of February. Now we are $3.781⁄4 again, up over a dime for the day and hunting a top again.

The soybeans did not make a new high last time. The big high was on Jan. 18, at $10.881⁄4. Since then we have been as low as $10.17, yesterday. That is a drop of over 71 cents. Now we are trading $10.43, getting close to a one-third retracement to the high. This will obviously be a key week to find whether there are new highs at hand, or if we just continue to trade the cycle.


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Marlin Clark is an associate of Russell Consulting Group, with a local office in Williamsfield, Ohio. Comments are welcome at 440-363-1803.



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