Which way?

Agriculture.com Staff 04/10/2009 @ 10:42am

The soybean market has been a bit of a surprise this spring. It has actually been following a pattern that is very similar to the normal pattern on the long term seasonal charts. What seems to be surprising is the strength it has shown when the economy appears to be so bad. In most years prior to the bull market of 2007-2008, seeing soybean futures at $10 in April would be a huge cause for celebration. Historically we have had those prices only when a drought damages yields.

Big questions remain with the economy in general. The stock market finally seems to be headed in the right direction. The portfolio I watch is up 20% since March 5. It is at the same level it was on October 24.

Of course it has been up and down more than once since then. While driving to my farm on the Missouri River Bottom I saw a house with a foreclosure sign. It is in a residential lake development. The rumor is that there are many houses for sale in that community, but this is the first I have seen in foreclosure. I feel for the individuals who are losing their homes, but I also hope that developers will buy less farm land to turn into subdivisions in my neighborhood.

The grain stocks report that came out this week was positive for soybeans. The market initially reacted accordingly-for a while. However, but by the end of the trading day prices were mixed with nearby beans far from the high of the day and old crop up a few pennies. The big question is whether the sell off late in the day on Thursday was a function of traders evening up positions before the long weekend or if it was a classic example of going down on good news. If the latter is the case, it is a bad sign for prices next week.

Personally I am ready for the weather to warm up and field work to begin in earnest. I have been doing my usual activity to get in shape for planting. I spend about two hours a day for a week cutting trees along the field borders. By the time I have done that, I am glad to be in the comfort of the tractor cab watching this year's crops go into the ground. It will be interesting watching the soybean market Monday morning to see which way prices move after the long weekend.

The soybean market has been a bit of a surprise this spring. It has actually been following a pattern that is very similar to the normal pattern on the long term seasonal charts. What seems to be surprising is the strength it has shown when the economy appears to be so bad. In most years prior to the bull market of 2007-2008, seeing soybean futures at $10 in April would be a huge cause for celebration. Historically we have had those prices only when a drought damages yields.

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