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Planting Season Can Be Stressful
The planting season is pretty much finished here in Cass County, Nebraska. The season started the early part of April under very dry conditions. Progress was rapid with few days out of the fields because of too much rainfall. That all changed very quickly on the night of Mother’s Day when a major rain storm hit Southeast Nebraska. Totals ranged from 2.5 inches to 4 inches. It came in the middle of the night and very fast. Fields and farms where there had been a lot of tillage suffered considerable erosion. In my case I was fortunate that the no-till fields were mostly undamaged. Another four tenths yesterday (Thursday) morning made the short term moisture situation look much different.
I had only 30 acres to finish planting when the storm hit. I got that done on Thursday, May 15. There was a lot of concern that two cold nights last week had caused frost damage. A quick inspection showed that the corn was small enough that the frost caused only superficial damage. Planting was slowed more by equipment problems than weather. I coined a phrase “old farmer, old machinery” to describe my situation at planting time. Even at that, I survived another planting season in good time.
The stress of machinery breakdowns and weather problems is past for me, maybe forever. However, adding to the above mentioned problems are the concerns in dealing with the markets. Demand for soybeans has been very good and improving for several months. It seems that there is no way the current supply of beans will be sufficient to meet demand until the new crop is available. A comment yesterday on the radio said that South American beans are being brought into this country, but not fast enough to solve the problem.
Demand for corn has been surprisingly good since harvest. However, the good times that appeared on the horizon ended on May 8. Since that day corn futures prices have been in a short term down trend. I call it short term because I hope that the trend will again reverse itself and rebound. Interestingly the top of the corn market was on the exact day that the long term charts show the spring high in soybean futures. Today soybean futures are 48 cents higher than they were on May 8. At the same time corn futures went the opposite direction.
A weakness in the use of long term charts is that seldom does the event in the markets hit on the exact day shown on the charts. Sometimes it will be off for a few days. Sometimes the event takes place in a different crop than the charts show as it has so far this year. Sometimes the charts even miss the event completely. An even bigger drawback in the use of long term charts to trigger sales is that there is no mechanism to tell the marketer how many bushels to sell. In my case I got a sale made within a few cents of the top. However, I did not sell as much as I should have based on the inventory in my bins.
My fallback position is that the long term charts show another price peak on June 20. Beyond that is my “drop dead” date of July 4 when all of the cash corn needs to be priced and delivered. I do not want to be pricing a big percentage of my crop on that last desperate move. I remember back to 2008 when the last sale was made the day after the July 4 weekend. It hit the highest cash price in history at my local elevator. By the time the market stopped dropping after that the price was several dollars lower.
The market will probably give another opportunity to make a sale before the drop dead date. It may or may not be exactly when it is expected or at the price level we wish for. Long term charts show that getting the sale made during the next window of opportunity will be very important to profitability.