Kansas Association of Wheat Growers

 November 20 Dan Maltby Marketing Newsletter 

We’re cruising into Thanksgiving week, which means a day or two off for many involved in the business, but it also means December options will be expiring on Friday the day after eating so much your pants explode. Maybe some crazy option expiration in a thinly attended session is what we need to shake the slumbering markets awake…but realistically, these markets are already so heavy it’s going to take something major to move ’em, and I don’t see this week as being able to do it. But having said that…

This 55-day weekly closing futures table is coiling more and more every week, so one should be alert for some big moves. I know whenever I say that, most farmers hope that means “finally a big rally is here”, but unfortunately, even though the markets are oversold, it’s very easy to kick ’em when they’re down, thus the path of least resistance is lower, which it has been for about the last 4 years.

New red numbers in KC wheat, even with the recent Iraqi business. If a market shakes off bullish inputs and sets new lows, the conclusion must be we’re in a powerful bear market. New red numbers in corn, still reeling from the big yield increase in the Nov WASDE update. Chicago wheat is only a penny away from a new red number, and even spring wheat lost 13c last week. Beans are right in the middle of a 40c range, awaiting new South American fundamental inputs.

This is a heavy, heavy market depressing to many. In fact, the Minneapolis Star Tribune ran a front page article today about the stress on farmers facing years and years of low prices. And last week or so, I mentioned grain earnings of large agribusinesses are way down for the period. In times like these, I don’t think anyone is having much fun.

 

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Source: Kansas Association of Wheat Growers