Signs of spring already scaring this trader

0
77
Soybeans
(Farm and Dairy file photo)

Saturday Squeeze and I had one of those weather discussions. What a weird winter! Cold, then hot, not a lot of snow.

Is it all over, or will we have a last blast of winter in April, like usual?

Yesterday I noticed the maple trees are budded out. The first crocuses normally peak through the snow, but the snow is gone.

This morning the first flight of Canada geese flew over. (Welcome home, but please nest on someone else’s pond. I like to walk around mine without barn boots on.)

Signs of spring are around us, and as this is written we are still (barely) in February. The winter market is tough on commodity writers. Often there is little to write about until we get to the end-of-March USDA Planting Intentions Report, so we make it up as we go.

I use it as an excuse for homilies and old family stories. (Example: You know why milking cows is like beating your head against the wall? Because it feels so good when you stop!)

Something of interest

Most of my farmer contacts and readers are relieved when winter is over and I find something about grain to write about. This winter has been a little different, off and on.

This winter we had South America to talk about. Instead of just watching markets stagnate or move lower. We have been watching Brazil and Argentina harvest the “other” crops of corn and beans, and we have been able to see a serious rally in soybeans and some “go-along” price changes in corn as their crops have struggled.

We don’t enjoy their pain, but better them than some family in Illinois or Iowa, right? Once again this morning the market letters are mostly about South American weather, with declining livestock prices thrown in to fill them out.

The corn market is firm on fair demand and light farmer selling, but the South American weather is the big factor. Soybeans are teasing contract highs on strength from soymeal and on, here it is again, South American weather.

Argentina and Brazil

The weather has been dominated by dryness in Argentina, and wet conditions in Brazil. The dry has hurt yields in Argentina. The wet has mostly delayed the bean harvest in Brazil and has limited the acres of their second-crop corn, which should have been planted by now.

They still expect a record harvest of soybeans, but a smaller record. But, Andrew Lloyd Webber, in another context, told us, “Don’t cry for Argentina!” Actually he said something a little different, but I am running out of weather news.

Sadly, the big news from South America is that Brazil is poised to become the world’s largest exporter of corn. That is hard to believe, but it follows the fact that they have been the largest exporters of beans for several years.

This is why we follow Southern Hemisphere weather-the region continues to grow in volume and in competition for our world markets. And, much of the time they can offer grain cheaper! Our own poor weather is cause for concern for the winter wheat crop.

Dry weather for the hard red winter wheat crop has USDA good/excellent crop ratings as low as four percent of the crop in Kansas and Texas. The result is Chicago market soft red winter wheat prices, after a brief dip, returning near the recent high prices.

Early trading

March futures made a recent high of 4.64 Monday before closing at 4.60-1⁄4. Early trading Tuesday, Feb. 27, as this is written, has us back almost to 4.63. We were 4.67-3⁄4 on the 13th, and 4.68-3⁄4 clear back on Oct. 3.

In between we were as low as 4.10-1⁄2. The contract high is back in early July, at 6.04-3⁄4. That was a great price, but it is hard to commit bushels that are not planted, especially of wheat. A wet fall, and the wheat is sold but not planted.

March corn futures hit 3.70 Monday, equaling the February 20th price. We were a half-cent higher one day in late September, but the contract high is form July 12th, at 4.22-1⁄4. Nobody sold much then, but it seems like a good price today.

Meanwhile, the March soybeans are bumping against the recent high, what we call “testing resistance.” Overnight we traded 10.39-3⁄4, but have slipped to 10.36-1⁄4.

We actually hit 10.47-3⁄4 briefly Monday the 26th. That is close to the 10.50-1⁄2 contract high of July 12th, and a warning that the rally might be over.

STAY INFORMED. SIGN UP!

Up-to-date agriculture news in your inbox!

NO COMMENTS

LEAVE A REPLY

Receive emails as this discussion progresses.