New Year's sales
Friday is the normal day for my marketing column. Since the last 2 Fridays were holidays, it has been 3 weeks since my last writing. Actually, I usually send a column on a different day if the regular day is a holiday. However, it seems as if this time my mind was preoccupied more with survival than with marketing. All fall I have been telling all of the young farmers that the harvest problems this fall were nothing compared to some I experienced as a beginning farmer in the late 1960s and 1970s.
The storms we have experienced in the last month have surpassed anything even this grey haired farmer has experienced. Beginning December 7, we had more snow in December than in any previous December in history. Compounding the problem was the wind which blew the snow around and caused the roads to be impassible for a total of 6 days including today.
The only previous year in my farming career that compares to this is 1983. The factor that makes this year better than 1983 is that back then I had a lot full of cattle and a house full of company for the six days over the Christmas holiday that we were snow bound.
My big concern this year is that the grain bins will have snow on top of the corn. With the corn a little wetter than I like and peaked in the middle, I am anxious to get the snow off the roofs and get a load or two delivered so that the rest can be leveled off. That could be quite a job.
Marketing during all of this is less of a concern than keeping the grain in condition. Nonetheless, at some point we need to pull the trigger on sales. For corn, I am not in any hurry to set the price. January and February are not usually the months to be making sales. I anticipate that the corn in this community will stay in condition until the middle of March. Hopefully the weather will cooperate and some of the corn will be delivered by then.
The soybean market is a different story. Most of the beans went into storage dry enough to keep indefinitely. Processors around here have been offering some attractive basis levels to try to buy inventory. Many of the beans still in farmers' hands are in bins that are not accessible because of the snow. Farmers with beans in commercial storage can take advantage of this attractive bid.
For the last few weeks of 2009 the rumor around the trade was that hedge funds were going to rebalance their portfolios after the New Year by buying grain futures. This caused overnight markets on January 4 to be sharply higher. It may turn out to be a case of the Murphy's Law that says "What everyone knows ainâ€™t worth knowing." Shortly after the opening bell the market ran out of buyers and prices retreated.
I used the higher opening to price another increment of my 2009 beans. I am down to the last the 10%. It is unusual to see the dead cat bounce last through the end of December. It looks now as if the top of the move for 2009 took place on December 16.
It will be interesting to see if the anticipated rebalancing does in fact take place and if it does, whether it will bring soybean prices back. The soybean market is similar to the corn market in that January and February are not normally months to be making sales. I will know shortly if the sale I made in January was the best sale of the marketing year. I have been saying during this rally that it is difficult to look the other way when beans are over $10. Sometimes the price and profit level gets high enough that it is wise to ignore all of the other factors and make the sale.