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Never sell soybeans in February?
One of the marketing principles I have promoted over the years is to never sell soybeans in February. It is based on another bias of mine developed over the years, “Nothing good happens in February."
While I cannot say that either of these is 100% reliable, they hold true often enough that they form the basis for marketing actions that generally prove profitable over the long period of time.
The markets in February are generally depressing because the 2012 crop has long since either been sold or is safely put away in bins for sales later in the year. If it has been sold the money has probably been used or invested after January 1 and is no longer a worry. If it is still in the bins, the plan was probably to sell on the spring rally which typically is in April May or June. In that case the decision has probably been made to store no matter what prices do in January and February. With the price action that has taken place this week that may have been an unprofitable attitude. Nonetheless it has been done and probably will not be changed now.
In many years this would be a time to write a marketing plan for the 2013 crop. It would be a time to start watching for opportunities to forward contract new crop grain. With new crop soybeans and corn two dollars a bushel below bids for immediate delivery, I cannot get excited about either the futures contract prices or basis bids. It is too easy to remember what happened in 2012 when it seemed that everyone in the grain marketing business was so sure that a bumper crop was on the horizon even though it was not even planted yet. With the end time for selling the 2013 crop still 18 months away in August of 2014, I cannot sell into that much discount with so many unknowns about demand and poor soil moisture potential being so big of a yield factor.
Even the weather is depressing. When this week began there was a nice snow cover over much over southeast Nebraska from the storm on January 30. There has been just enough warm weather to melt the snow and leave the landscape brown. The moisture equivalent from that snow was a half inch or less. It was hardly enough to break the drought. Now it is gone except for the muddy conditions which have left country roads difficult to drive on.
The winter meetings that normally bring a bit of brightness to this time of year have had poor attendance because of the flu epidemic which has been worse this year than in the recent years. Hopefully that situation is almost past. The meeting I attended in West Point on Thursday was almost a full house.
The bright spot for me yet in February will be making a presentation at the annual “Women in Agriculture” meeting in Kearney on February 22. It has been several years since I have been on the program at that event. The last time I was there I remember that as a very up beat meeting. My topic, “Personalities and Profits” was a big favorite in exploring the theory of why women are better marketers than men.
I also look forward to Commodity Classic February 27 to March 2 in Florida. I have missed that event only twice since the Soybean Expo in 1980. It is always a good time and place to learn a lot and to renew old friendships. I will not be on the program for that event this year. By the time Classic is over and we get back home there should be some attitude adjustment as planting approaches and the sun shines longer each day.