Grain prices were nicely higher for corn and soybeans on the Chicago Board of Trade. The new week started with March corn futures up two cents and soybeans for March up two and three quarter cents after being more than nine cents higher at one time.
The hope that the Monday markets represented a return to bullishness was dashed in early trading Tuesday, Feb. 23. This Tuesday morning corn is back down the same two cents, and the soybeans are down more than six.
To say that we had no follow-through would be putting it mildly. This market has improved in the last few days, but in a cyclic pattern that shows no convincing evidence of a sustained move.
To the farmers, grain is cheap, and it is time to sell some. They held off in January, and now February has come and nearly gone.
Springing ahead
The sun is moving back north, the days are getting longer, and the snow melt has us thinking of spring. Spring, with most of the annual costs of farming coming due, has demands for grain sales, with little price reason to make them.
Cash flow is becoming king, and soon. News this time of year is focused on the South American corn and bean harvests, and on outside markets.
Analysts say that the Monday gains were due to higher crude oil prices and better stock market prices.
Those pretty much define “outside” markets. “Short covering” was also a help to prices, as specs worried that they had run things too low.
Other side
But, the higher dollar took charge, and hurt prices at the end.
Our strong currency makes our product hither priced in foreign currency terms, and hurts exports. The South American crops seem to be forecast as being better than expected.
Northern Brazil is expected to see light rains the first of the week, which will delay slightly a harvest that is on good pace. One major region of the country is already 50 percent harvested.
One expert now says the Brazilian crop is another 1.0 MMT better, at 99 MMT for the crop. Remember, the yields were thought to be poor, but with higher acres giving a record crop.
That record crop is still getting bigger. The same expert says the Argentine bean crop is at 59MMT, but may be better than that.
Higher prices
The Southern Hemisphere crops emphasize the facts of life in our soybean marketing year — it is hard to get prices higher after the first of the year. The market just waits for the second harvest in the world.
World wheat outlooks are mixed. In the U.S., we are looking at crop condition reports that changed very little in the last week, and have been favorable. In Ukraine, we are seeing estimates that the wheat crop will be only 17.3 MMT, compared to a high 24.8 MMT.
That reduction is not helping prices overcome the generally burdensome supplies in the world as a whole.
The prices
Looking at prices, the March corn futures are trading $3.65-1⁄2 this Tuesday morning, Feb. 23. That is down two for the day so far, and is more than eight cents off the recent high made on Feb. 2.
It is still 11 cents above the recent low of $3.58-1⁄4 made on the 12th.
Corn made a good move, but it seemed to end Monday. The March bean futures are off two cents this morning, after a good day higher most of yesterday.
Looking at the chart, it is very significant that we have now made three highs at nearly the same price, but have not been able to trade through what is now very strong overhead resistance.
On Jan. 19, we traded to $8.88. On Feb. 2, we got to $8.89-1⁄2. On Feb. 22, we touched $8.87-1⁄2. These are virtually the same price, and this is now the price we need if we can go higher.
Wheat prices
The March Chicago wheat is trading at $4.56-1⁄2 this morning. That is down two cent for the day so far. The recent low was $4.55 on Feb. 9, and again on Feb. 12. So, we are back down near the low, in a market that has been making smaller cycles, but lower ones.
We had bounced to $4.70 on Feb. 17.
