All of us of a certain age can hear the Sergeant Schultz voice when we close our eyes. He is large, bulging out of his German Wehrmacht uniform as he stands at the commandant’s desk and claims, “I know nothing!”
Hogan’s Heros have suckered him again, and he is trying to stay away from the Russian front.
In northeast Ohio, farmers are mostly standing on the carpet in front of the Farm Credit officer, trying to get the line of credit renewed, and trying to explain why they are still sitting on most of their corn and beans. At the same time, we scribes whom some of you look to for insight are staring at charts, reading opinions, and admitting, “I know nothing.”
Well, mostly we don’t actually admit that, we just think it while we put out the daily explanation of what maybe happened today or last week.
Gut check
Making the transition from $8 corn to $3.50 corn has not been much fun. “Beans in the teens” became a reality, then a fading vision, then a pipe dream. It is January, there are bills to pay, and winter has been warm, but bleak. There has been little snow, even in Ashtabula County, this winter. There has, unfortunately, also been little seasonal price improvement in the grains.
With no fundamentals to hang my hat on, I have held onto the fond hope that seasonality alone would help prices. That is, as we transition into spring, we normally see an improvement in prices. We get away from the full-bins feeling and start wondering what price it takes to buy grain.
Maybe it is seasonality that has moved Chicago corn futures off the bottom for corn. We put in a low of 3.481⁄2 for March futures on Jan. 7, after falsely thinking a couple of times that the bottom was in. We have been trading over 3.70 off and on the last few days, so that is encouraging.
Sadly, we have done that with little real news. So far it is a “dead cat bounce.” (As in, even a dead cat will bounce a little!)
Even exports bleak
This should be the time of year that we see large exports of corn. Low prices are the cure for low prices, they say, and low prices do inspire buying, as long as those grinding the grain don’t think it will be cheaper next week.
In fact, exports are scary low. We have moved out 21 percent less than at this time last year.
Maybe the real good news is that prices have recovered even with crappy (that’s a technical term I don’t have time to define) exports. It doesn’t help that the stock market is down more than 10 percent since the first of the year. It doesn’t help that our dollar is strong, as our weak economy is still the best thing going in the world right now.
And, yes, oil
It actually doesn’t help long term that we have only 515 drilling rigs working in the oil patch compared to 1,317 this time last year. Yes, the $18 fill up this week, with help from the Kmart 20-cent coupon, was a great experience, but riggers eat a lot of steak when the work is going well.
The oil bust reminds me of my two favorite pickup bumper stickers from during and after the Alaska boom. “Please don’t tell Mom I’m working on an oil rig! She still thinks I’m playing piano in the cathouse bar!” And after the boom: “Dear Lord, please send me another oil boom, and I promise I won’t (blank) it all away this time!”
Hope still springs
Today the grain farmer is like that out-of-work boomer. We watched the $8 corn come and go, and really didn’t ever think it would be like this again. Louis Lamour used to write about the puncher who starved through winter, wondering where his summer wages went.
The Bible says that the farmer should plant in hope. My hope is that we see some continued price improvements in corn, and a cyclical bean chart that turns to higher cycles instead of the last three lower one.
Then we can go into spring ready to plant in hope for better prices next year.
