By Marlin Clark
As I write this, we are in the last day of the second January mini-thaw. We got two days of warm weather early in January, and now are getting a quick follow-up.
Traditionally this time of year, we get warm weather for a few days that melts off the snow enough to remind us of all the unfinished work from last fall. The lawn that needed some attention one more time. The tree branches still lying on the ground. The tree skirt that is hanging from a tree branch in the front yard, re-painted but not re-installed.
The satellite TV repairman is here re-cementing the dish post that got loosened in the freeze-thaw. First there were no HD channels. Then, there were no channels.
Winter will return tomorrow, but now a couple of days of ugly faux spring have changed the landscape from white and gray to brown and gray. I am reminded of one of the reasons I like snow: the color!
Gray markets
The colors have changed, but the markets are stuck in their recent pattern. Corn prices bounced off the recent low once again. Soybean prices have rebounded from the recent new low, but are stuck below the overhead resistance formed on the chart by the last three lows. Wheat prices were up for four sessions, but after getting close to the contract low again.
Looking at the specifics, March corn futures are currently trading at 3.51 1/4 this Tuesday morning. That is down three-fourths of a cent for the day, but is still well above the recent low 10 days ago at 3.45 1/2. We actually bounced 9 cents off the low for a high of 3.54 1/4 in late December.
The lows have been consistent, however, and each one reinforces the support we see at the bottom of our trading pattern. The contract low was just a quarter of a cent below our recent low.
Soybeans, meanwhile, made a nice bounce off the new low of 9.44 1/2 March futures made on Jan. 12. We are trading March futures at 9.86 1/2 this Tuesday morning (Jan. 23), and that is just three-fourths of a cent below the Friday high.
Beans were helped by good export numbers that exceeded expectations. We shipped out 1.419 million tonnes of beans, against expectations by traders of one to 1.4 million. So, not a blowout, but slightly above the rosiest prediction.
Looking south
Weather concerns in Argentina fueled six positive days of trading. The market continues to study South American weather for pricing clues.
Hot, dry weather in Argentina has helped corn and bean price prospects, although the corn here is slow to react. Talk is that the Argentine corn crop will be reduced. The early soybeans are now flowering, so the dry weather is limiting the number of pods that will be set. Northern Argentina is forecast for some rain shortly, but the longer term forecast is for continued dry weather there, also.
Spec funds
Dragging on the market is the mood of the large spec funds. They increased corn shorts by 5000 contracts this week. They increased the soybean shorts by 14,000 contracts and even the wheat futures have been shorted an additional 16,000 contracts.
The specs can turn around very quickly, but right now their mood is indicative of a market that struggles to seek higher ground.
So, another week, and still no good reason to be bullish on these markets. Someday the prices will move sharply higher. When they do, we will all be able to look back and say why it happened.
Looking ahead for market movers right now is a little murky. A little like peering into the windshield in one of those white-outs that will be coming back any day now.
