SoyRoy: July 4 Grain Ownership Not Recommended
One of the first things I learned about marketing when I began farming in the 1960’s was that good growing conditions bring low grain prices. Sometimes bad growing conditions also bring low grain prices! As I look out of my office window, growing conditions here in Cass County, Nebraska, look about as good as I can ever remember. Some farmers in this part of the state experienced the frustration of hail ruining their crops already this year. Some also are coping with excess moisture. Production will be hurt in those places. However, my take is that on average, conditions are average or better for most of the Midwest.
I had more than my share of problems getting the 2014 crop planted. As I cut back on machinery updating in anticipation of my retirement in the future, I have to contend with equipment that breaks down often enough to cause stress on the operator. Still, I finished my soybeans on May 14. That is about average for me. Storms the week of June 1 left a lot of runoff and erosion problems, especially where conservation structures were inadequate. However, the terraces I had converted to drain into tile waterways held the soil in place better than I anticipated. It appears that a little residue in future years will do a good job of reducing the problem in the next downpour.
I took the opportunity last Monday to scout the field I farm on the Missouri River Bottom In preparation for post emergence spraying. Much to my surprise the water that had been standing in the corn rows from a heavy June 3 rain had all soaked away. The corn was standing tall and the soil had absorbed any excess that could have caused a problem at that time. I hope the rest of the summer goes as well. The custom applicator was there later in the day to take care of the weed control issue.
Unfortunately, the markets did not go as well as the production. There was not much to make farmers happy with the grain prices this week. The long term seasonal charts for old crop corn and soybean futures show a price peak around June 20. If it comes, it will be from a level that is disappointing compared to a month ago. This weather rally is traditionally difficult to predict both in terms of timing and the extent of the price improvement. For those who want to have grain sold before harvest, the next good time for soybean sales is the few days before the September crop report. For corn it is approximately August 20. Sales before those two dates have good odds of being profitable if they are done on rally days.
I have a rule that I never want to own grain after the July 4 holiday. If you have old crop corn or beans that are still unpriced, hope that the rally Friday continues for two more weeks to provide the opportunity for additional sales. Meanwhile I am eagerly the possibility of a minor price improvement in the next two weeks for good news in the grain markets.