Soy Roy: Better Marketing Times Are Coming
Since the last week of August, grain farmers have waited and watched for signals to add to sales of new-crop soybeans and corn. There has not been much to shout about in either of the grain commodities. Corn futures have had a minor rally off of the low in August — at least it was enough to say that it was an improvement of the cash price from a very low level. For soybeans, the price action in the futures market could be best described as a flat line. It seemed as if the market has been dead in the water.
Minor moves up and down have left prices almost unchanged. Farmers who have been wanting the dead-cat bounce to give a sell signal are frustrated by the lack of progress in getting sales made. Action in future prices this week may finally be giving a hint that the market atmosphere is about to change. On Monday and Tuesday, there was a lot of volatility in prices but not much progress in either direction. On Thursday and Friday, it seemed as if the attitude changed. Market comments went from overwhelming surplus to excellent demand. At the same time, yields are coming in high enough and big enough to offset low prices. It remains to be seen if that works out as well as expected.
When the dust settled at the end of trading on Friday, corn had an impressive close for the week, and it was no longer necessary to point out progress higher in the futures market. The rally in futures prices really looks like a rally! Soybean futures are not quite as impressive. However, a rally is still a rally, and the charts are starting to look like there could be better times ahead.
I continue to watch both cash and futures prices for a signal to make sales of new-crop soybeans. So far, that has not happened. Two or three days of higher prices – like the end of this week – will put prices into the selling territory. Do not be impatient. There is still plenty of time before the end of the year. Chart action does not necessarily follow a straight line. It is possible that there will be a test of the harvest low before prices turn higher for good. Do not be shocked if that happens before prices head higher for good. No one said that marketing would be easy!