October 31, 2011
By: Craig Haugaard, Grain Origination Manager
CORN: 7 lower
With today being Halloween I thought it was time to hear from the Voice From the Tomb.
Long ago in the Windy City there lived a grain trader who became incredibly wealthy. Just when it appeared that he was going to live a happy and charmed life his wife fell ill. He took her to all the best doctors of the day but in spite of his efforts she got steadily worse and passed away. He was left heartbroken with three small children to raise. As his children got older he was heartbroken to see that they were all very lazy and were counting on inheriting his great wealth. As he aged he became increasingly resentful of the way that his children took him and his wealth for granted. Finally, he decided that since his children were so lazy he would leave them no money. He finally passed away and after the funeral the children gathered in the lawyer’s office for the reading of the will. To their shock the attorney announced that the money and property was all bequeathed to various charities. Finally, the attorney got to the children’s inheritance.
You could have heard a pin drop as the attorney read these words; “You have taken me and my wealth for granted but if you follow my advice you will still have the fortune that you desire.” The lawyer then unfolded a small note and read the following words to the
stunned room; “Buy July Corn on March 1, sell July corn on May 20, buy December corn on June 25 and sell December corn on August 10th.” He took a breath and continued, “Sell March wheat on January 10, buy July wheat on February 22, sell July wheat on May 10, buy December wheat on July 1, sell December wheat on September 10 and buy March wheat on November 28.”
History does not record if his children followed his advice or not but over the past century his words have rang true with many traders. They have rang true because the commodity markets tend to have seasonal patterns that are repeated year after year. As we look at marketing our crops in the coming years I think we would be well served to heed the voice from the tomb. Seasonal patterns can tell us when marketing opportunities might occur. Seasonals can also help point out times of the year when it may be best not to make sales. Knowing these patterns can help you plan
the timing of your sales as you put together your marketing plan and ultimately this voice crying out from the tomb can make you more profitable. There is nothing scary about that.
In the meantime we need to trade what we have in front of us and this morning that appears to be a stronger dollar as Greece appears to be unable to meet the conditions laid out last week. We are also still fighting cheap feed wheat as well as seeing an increase in the number of nations that have corn for sale in the export market. One potential bullish story could be the private analysis reports that start getting released this week ahead of next week’s USDA report. Technically, this market has really turned sideways and choppy. Maybe next week we will get some news that will move it one way or the other.
SOYBEANS: 11 lower
Export sales this year are currently running 33% less than last year and that may cause the USDA to lower their export projection next week. That fact coupled with a stronger dollar and great planting conditions in South America should have this market opening lower this morning. Technically, two of my three indicators are bearish with support showing up in the November futures at $11.52.
WHEAT: HRS unchanged HRW 7 lower
Egypt bought wheat from the Ukraine over the week-end as the cheap Black Sea wheat continues to beat us up in the export market. One the “bright side” the drought in the Ukraine appears to be getting worse while we have continued chance of rain in the forecast for our southern plains. With the higher dollar and cheap world wheat we will probably struggle this morning. Technically, all three of my indicators are currently bullish both Minneapolis and Kansas City futures.
The information contained above was taken from sources which Wheat Growers believe to be reliable, but is not guaranteed by Wheat Growers as to accuracy or completeness and is made available for information purposes only. There is a risk of loss when trading commodity futures and options.