Markets, like the Cubs, bring highs and lows
John Cripe is director of MID-CO COMMODITIES Inc.
Posted on: 6/17/2011 9:23:00 AM
This has been a tough spring. Lots of volatility, uncertainty and fear going around. I am not talking about the grain markets; I am a Cubs fan and they are playing horribly.
Most years you can “keep hope alive” until at least the July All-Star Break, then bad things start to happen.
The news in the grain markets have been equally troubling. Obviously, wet weather has us off to one of the slowest planting starts in history. To the west there already is a drought in the southern plains, some say the worse since the 1930s. The rest of the world is having weather issues of varying kinds also. Concern of dry weather in Russia, Europe, China, and Brazil is growing again.
World demand remains good despite the earthquake that hit Japan and the “Arab spring” that has brought turmoil to the Middle East and the oil markets. The funds have not lost their appetite for buying commodities as concern about inflation is still a fundamental worry.
December corn has made a new high and is trending higher; soybeans at least are holding their own. This time of year is very important for the markets. December corn tends to top out in June and go lower into fall, something like 80 percent of the time over the last 30 years. (Did not work that way last year).
Of course, past performance is no guarantee of future results, but if you wanted to get a good price for corn the last 30 years, history is an important thing to know and keep in mind. Soybeans are more of a June/July top, but the same seasonal price pattern applies there also.
Markets tend to put in bad news early. So I guess the only thing we need to ask ourselves is what additional bad things could happen to this crop after the 4th of July?
Did I mention I am a Cubs fan?
John Cripe is director of MID-CO COMMODITIES Inc. His e-mail address is email@example.com.