I have to admit, the most interesting development in my journalism experience this week was not the late-week soybean rally or comments about the impact of the recent WASDE report from the U.S. Department of Agriculture. No, it was the raw excitement I got when I turned on my phone tonight and discovered that my Farm and Dairy column from last week was on the main news feed from Google on my Android phone.
Apparently, some phones had it on yesterday because I got a call from a stranger in the Midwest who was in the risk consulting business and wanted to talk about my market and grain experience observations. Now I know how he saw my piece.
Last week, I devoted much of the space to my experience visiting the Chicago Board of Trade for the first time with a group of my customers from Deerfield Farms Service. I also mentioned some of the history of the board and its changeover to computer trading.
My column on marketing has been published online for many years and is my only digital footprint — no X, no Instagram, no Facebook. I’m not totally off the grid, apparently, since Google has now picked me up on their nationwide news service, and I’m not just slightly hidden on Google. If you hunt around on Google, you will find that Farm and Dairy is highly respected. An article I saw several years ago put it in a list of the 10 best ag publications in the U.S., and I get to contribute!
I have lost track. I am finishing either my 36th or 37th year with this column sometime this coming summer. I am apparently not an overnight success. I have finally been discovered, and I haven’t even been “planted” yet — a term my wife’s cemetery-sexton grandfather used.
Slow week
News has been slow over the last week. There is a little weather talk, a little export news and a little technical talk about buying that can’t be explained well, so technical buzzwords are used by analysts hunting for explanations for price changes.
The continued sag in Chicago wheat futures comes as the world supply is good and the influence from Kansas City hard red winter wheat as that crop improves does not help. The Northern Hemisphere wheat crop has long been in the bin, and fears of dry weather continuing in the Plains are not being talked about much right now.
March Chicago wheat futures were trading at $5.36 1/2 on the overnight going into Dec. 23. That is a gain of 3 1/2 cents so far tonight, but a mile away from the big high at $7.72 1/4 on May 28. The trend has been down all the way since May, with a high late August at $5.42, a little bump to a high Oct. 2 at $6.38 3/4 and then a high Dec. 20, at $5.29 1/4.
The soybeans have fallen since the dry weather was predominating in Brazil and Argentina a couple of months ago. The planting was being delayed because the South American farmers will not plant unless they are getting rain to germinate the crop and get it started.
Back then, the idea was that acres would be limited and yields would be lowered. The dry weather improved, and since then, they keep getting just enough. We were told the evening of Dec. 22 that half of Argentina will be dry in the week after next according to the 8-to-10-day forecast.
We are expecting light showers this week in the western part of Argentina and normal rain in Brazil. This weather could spark a little improvement in prices this week. We already had a bounce Dec. 20 which was thought to be a result of technical buying and short covering. That is, the buyers were supposedly buying back some of the contracts they had sold, and the charts were telling them to buy — or that was the best excuse given by writers who had to give some reason that soybeans improved 7 to 13 cents, depending on the contract month.
Downtrend
Soybeans have also been in a steady downtrend for months; no Northern Hemisphere weather conditions can give fundamental reasons for price improvement when the crop is in the bin.
Looking at prices, we had a March futures high of $12.38 1/4 in late May and then a high the next cycle at $11.47 1/2 on July 5. The next high came July 23 at $11 1/2. The March futures were as high as $10.87 on July 27 and $10.87 on Sept. 27.
More recent highs came Oct. 24 at $10.68 and then $10.44 on Nov. 8. By Dec. 9, we put the high in at $10.03 1/2 and then prices fell below $10. We were at $9.50 1/4 on Dec. 18 and at $9.77 1/2 Dec. 20. We were trading at $9.76 1/4 overnight going into Dec. 20. This represents a seven-month downtrend, with the highs getting progressively lower most cycles.
Corn
The March corn futures are a different animal. There, we have the last three cycles with very similar highs, which have given us, with technical analysis, a line of resistance around $4.52. We were as high as $4.52 1/4 on Oct. 2, $4.47 3/4 on Nov. 8, $4.51 1/4 on Dec. 11 and $4.47 1/2 on Dec. 20. On Dec. 23, we were trading at $4.47 1/2 on the overnight. We get cheap and then trade back to the same level again.
According to the Commitment of Traders report published by the Commodity Futures Trading Commission, the spec funds added 17,932 long contracts to their positions, which are now long a net 76,252 contract of futures and options. That is a bunch of soybeans!
At the same time, the funds are net short 88,971 contracts of soybean meal. That actually represents a spread position, betting the soybeans will gain on soymeal.
Export news tells us that Chinese bean imports are a record 3.567 million bushels from the U.S. in the last 11 months, and imports from Brazil are down 25%, at 144.8 million bushels. The market is talking up the idea that our new president will hurt our exports to China with tariff threats.
