Posted by: usset001 | December 22, 2009

Grain Markets Search for Price Direction

Like houseplants, a good blog is watered often and regularly. But my travel schedule has been heavy (see my photo of windmills on Buffalo Ridge in southwest Minnesota) and I am not good at multitasking. Besides, I like to contain my comments to the market and there just doesn’t seem to be much of note happening in that arena.

Corn prices are stuck in a trading range. Since mid-October, March corn futures have traded between $3.80 and 4.20 per bushel, with today’s market just about smack-dab in the middle of the range. Over the same time period, cash corn prices have also traded in a range of $3.30-3.80 per bushel. While prices trade in a range, they feel like they are drifting lower in a holiday market. The corn basis is soft and carrying charges are wider – both factors that speak to a less than robust market.

The story for soybeans is similar. Over the past ten weeks, March futures have traded between $9.60-10.70 per bushel, and cash prices in Southern Minnesota traded between $9.00-10.40 per bushel. Current cash and futures prices are on the high side of the mid-point. Soybean basis was very strong in mid-October, very weak one month later and currently rest somewhere in the middle today. The March/July spread went from a modest 5 cent inverse in mid-October to a modest 10-15 cent carry today. A subdued basis and widening carries do not speak to a lively price environment.

What should we be doing? I’ve already done it – I have pre-harvest marketing plans for 2010 in place. Some early sales are on the books and I am hoping for a strong rally in the first-half of 2010 to extend my pricing activities. Will we get a better opportunity in the months ahead? I can guarantee nothing but sometimes marketing demands patience.


  1. Nice picture of Zond 750 wind turbines!

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