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Never let them forget!

Whenever I hear a clever saying about marketing, I save it for future use in columns or radio shows. One of those archived bits of wisdom has to do with those of us who try to predict grain prices. It says, “If you are ever lucky enough to be right, never let them forget!” That saying seems to fit today’s marketing situation to a tee.

Last week’s government report showed bullish fundamentals for the soybean market. Supply and demand factors seemed so positive that November futures were up 38 cents on the day after the report was released. The positive psychology did not last very long. By the time a week of trading passed, futures prices were dramatically lower. Adding insult to injury, the basis took on the look of a harvesttime market.

I have fielded a lot of questions about why the market went down in the face of such tight supplies. My standard reply to such questions is that it was time for the market to be a little negative after the run beginning on August 7 and continuing through the middle of last week. For the last month or more, I have impressed on farmers’ minds that soybean prices usually drop following the September report. Sales made prior to the report are usually higher than those made later. Sometimes the cause is the focus on a large crop about to be harvested. However, sometimes it is merely the idea that harvest is just around the corner, and the processors feel they can wait for the new crop to become available.

November futures dropped from $13.96 to $13.39 in just over a week of trading. Comparing the prices to the lows in August, today’s markets do not look so bad. If prices hold anywhere over those August lows, the stage will be set for a better than average dead-cat bounce later in the fall. Meanwhile, I am enjoying the sales I made in the week prior to the government report. And do not forget which market commentator suggested making sales prior to the release of the report!

Meanwhile I started my spreadsheet on which I track dead-cat bounce prices. I use March futures as well as local the local cash price at the Midwest Co-op. When the sell signal comes to add to new-crop sales, I will be ready. I hope the results are as good as those for the last sales last week.

Crop scouting the week showed that soybeans are still about a week or more from being ready. However, corn has matured fast the last two weeks. We plan to start corn harvest on Monday.

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