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SoyRoy: No Frost Scare Rally?

Weather makes it hard to pull the trigger.

I have been patiently waiting for the opportunity to implement one of my favorite cash grain marketing strategies. It is what I call the frost scare.

With the high temperature this summer, I wonder if I should be searching for a more appropriate name to reflect the recent state of the climate. Until then, I will stick to the current description, which reflects the high temperatures we have been suffering through.

Under different climatic conditions and temperatures, the grain trade would be looking at our Canadian neighbors for signs of an early frost and a shortened growing season. That is hardly the case this year. With the adequate to excess moisture and warm temperatures, the soybean plants are maintaining their deep green color well past the normal time they start to turn yellow.

A trip to Grand Island last week for the Nebraska State Fair showed that crops only gradually starting to mature west of Lincoln.

Slowness in the agronomic side is reflected in the markets, as well. I am usually looking for a rally in the soybean market beginning around the middle of August. I use this as a time to get crops sold that will go to the elevator at harvest. By the end of August, I was beginning to think that a frost scare rally was not going to happen this year.

Never fear. The much-awaited rally in both corn and soybeans has finally materialized. Both commodities put in a five-day period of price improvement beginning the last day of August.

The price improvement, so far, has been minor. However, the movement was strong enough that I made some good-until-cancelled orders at the local elevator to sell new-crop beans.

All of my soybeans go directly to town at harvest. So, it is important to get a large portion priced early. I thought that the market hit my orders early in Thursday’s session. However, when the trading was over, it showed that my orders were a few cents above the target.

In other years, I have had orders missed when trying to sell small quantities.

That is one of the frustrations of being a part-time farmer or, in this case, a landowner farming on a share lease.

From previous experience, I know that pricing grain can be frustrating. It requires a great deal of patience as well as understanding of the markets and knowing when to pull the trigger on sales.

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