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Roy Smith: Told you!

09/21/2012 @ 7:53pm

My column two weeks ago on September 7 featured comments on the strategy of making soybean sales the day before the September crop report. Over the years I have watched price action around the report which was on September 12 this year. I have come to the conclusion that making sales a day or two before that report is preferable to waiting until harvest. 

This year making those sales was especially difficult for those farmers whose yields were still in doubt. As it turned out, the day before the report the cash bid for corn was $7.52. I sold all of the corn I had delivered from this year’s crop for $7.57, the close on the previous day. Today’s cash bid was $7.20. 
I have no soybeans harvested. However, I speculate with a small futures position to test my seasonal soybean marketing theories. I made the decision to roll a long position to a short position by selling November futures two days prior to the report. The fill was made at $17.20.  Today the closing price was $16.21. That makes for an unrealized profit of $.99. Those who followed my strategy of selling before the report have to feel pretty good about their action now. 

Long term charts show another two weeks of potential downward prices before the normal harvest low on October 3. It will be a long climb back from the hole dug this week. I do not like lower prices. However, I feel good that my seasonal analysis has again proved profitable in pricing cash grain. I also am happy that I can prove the accuracy of the long term charts using a futures account with no supply and demand calculations to confuse the issue. 

We finished harvesting my corn on the river bottom on Friday. I do not have the weight on the last load yet. However, I can safely say that the average was over 100 bushel per acre. The first soybeans to come out of the field in my community were done yesterday. From the road the plants still appeared to be green. Our soybeans should be ready by Tuesday or Wednesday. By then corn harvest will be  pleasant memory.

I do not remember a year when corn harvest has been finished in my community by the end of September. Soybean harvest should go as fast. I doubt that soybeans yields will be a pleasant surprise as corn was. Maybe the dead cat bounce will be big enough to offset the reduced soybean yields!  

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