Market Monitor

By Marlin Clark

Another leg up in the grains

Six weeks ago and a little more we finally made the big highs in corn and soybeans. I had been impatient, had predicted highs several times, and was finally right. As prices broke there were, as usual, technicians who said there was still room on the chart for one more leg up.

Then prices broke hard. One more leg up? Yeah, sure! Time to get grain sold before it got away from us. Well, as they say, that was then and this is now. Now we have new highs in corn and beans, and are back near the top in wheat. Now we are back to picking the top and wondering when we get there if analysts will pop up saying there is room for one more leg.

March corn futures have demonstrated a clear down-trend, then a clear up-trend. Almost every day we have seen a trade sometime that is higher than the high the day before, even if we don't close higher. On November 9^th we had a high of 6.17-1/4, then dropped nearly a buck to 5.20-1/4. On Monday and again on the Monday-Tuesday overnight we have seen a new high of 6.19, back up close to a dollar.

So far one can argue whether that is a new high or a confirmation of the old high. The numbers are close to the same. This means the next few days are significant. Do we actually make a leg higher in the charts, or are we just making a double top, which is a very negative sign. Either way, here is a selling opportunity. Cash farm prices for the summer are now close to $6, and the question is whether to be brave or foolish selling or waiting to see if we go higher.

The March soybeans are now well into new territory, knocking on the door of $14. Beans in the teens, well into the teens! This did not happen easily. The last high was 13.54-1/2 on November 12^th. Just five days later we were at 11.83. That is a drop that defines "ugly" and was depressing at the time. Here were are, though, just a month and a little later, and the overnight going into Tuesday has us at 13.96-3/4. So, here two we are looking at one more leg up, but in the beans we have actually made at least part of the leg instead of just confirming the high. We are more than 40 cents above the old high, and made another gain this morning before the daily open.

The March wheat futures have not shown a clear chart, having many erratic days. Nevertheless, a look here confirms a return near the high. On November 1th we had a low of 6.56-1/4, just after the corn made a high, and just when the beans crashed, also. By the 7^th of December, however, the March wheat futures had bounced to 8.11. What followed was ugly, though. We dropped to 7.58, but now have come back to 7.90. Maybe the high is in sight.

Some of the bounce came after USDA reports in December, but for the life of me, I could not have said that anything in them was a help. This seems to be a trading cycle that is determined to put in another leg, and may just be driven by outside computer trading of huge and fickle positions. The next real fundamental news is just ahead of us, with the January Inventory Reports. This will confirm the reason we are trading higher, or it will but the top in, or it will confirm the top that may be made before the reports are released.

In any case, these are touchy times, and judicious sales are required.

 

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Market rebounds towards highs

 

I got a dose of reality in the Covered Bridge Pizza parlor in Andover Monday night. A reader asked me, when are you going to say that you know what the market is doing?

This is a dig at me for frequently admitting that I can follow the direction after the fact, but am struggling for finding a reason for what is going on. The trend in this analysis business is to always sound pedantic, like the writer is all-seeing, all-knowing. Trouble is, that just doesn't happen, and my friendly reader was jerking my chain about my honesty.

Here I am again this morning. I have to report that, after weeks of hunting for a market top and finally getting it, I have spent the last two weeks watching prices go back towards the highs made and wondering why. If we finally broke prices on November 12^th based on crop reports that maybe made sense, why are prices going back up?

Well, when prices broke, the government was reporting some reduction in the crops of soybeans and corn. The Crop Production Reports were released on Friday, the 9^th of November. The market went sharply higher that day, but that was the last up day. By the next day the mood was that the market was overdone, and we made huge corrections. March corn futures dropped 97 cents in two weeks from a high of 6.17-1/4 to a low of 5.20-1/4. March soybean futures dropped $1.73-1/4, going from 13.48-1/2 to 11.75-1/4! March wheat dropped $1.43-3/4 to 6.56-1/4.

These were huge corrections, and very discouraging. All the way done people like me were trying to rationalize why the break was so hard after a minor USDA correction that was actually bullish. We blamed it on politics, the dollar relationship to the Euro, to market emotions, to the stirring of chicken entrails. The chicken entrails probably made the most sense.

Now, the market has rallied for a month, and we are back in the range we expected a couple of days after the report. March corn futures are trading 6.00 this Tuesday morning before the open. We have been up 17 of the last 20 trading days. On almost all 20 days the high of the day was higher than the high the day before. That really defines an uptrend.

At the same time the soybeans have come back 1.44 of the 1.73 break. The chart shows a nearly unbroken line of advance. Wheat futures have actually rallied back to made a new high, at 8.11 on 12/17, 18 cents above the 11/9 high.

Now the market is looking for the high in corn and beans again. Traders are talking about world-wide wheat supplies not being enough. They are worried about running out of corn and beans, with carryout estimates cut by the government. Now we are all wondering what is driving things again.

So, now comes traders to the U.S. Senate, asking that they look into action of the Board, and asking the regulators of the futures markets, the CFTC Board of Supervisors, to limit the positions of traders. The belief among the actual cash traders is that in 2008 when the corn went over $7, it was an artificial high put in by large-position speculators artificially moving the market. The result was elevators broken by being blown out of hedge positions by limited funds for hedging. The other result was that farmers were not able to cash in on high prices because commercial buyers were forced to stop buying,

It remains to be seen if we make new corn and bean highs. Suffice it to say that I will not be doing any predictions just now.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Chicago Markets sneak higher

Maybe I have just been asleep at the switch. Maybe I am loafing through the day, not paying attention. Maybe there is something finally going on in the markets and I am slow to react. There must be some good excuse for what I told a farmer this morning.

"On, nothing much going on. We gained overnight what we lost yesterday."

Well, it seems like that, but it isn't true. It has felt like the markets were just see-sawing around for no real gains. It seemed like we were in a trading range with no real direction. Problem is, I looked at all the charts this morning and we are making real progress with real short-term uptrends in place and a fairly dynamic wheat chart in place.

What happened? If I look carefully, we have been up and down on opposing days, but we are gaining a little in each swing. In the case of wheat, the last few days we have gained a lot. While I have been trading corn and beans, the wheat is back to the highest price since just after harvest.

For wheat, it is that time of year. We stop pushing away cash bushels at elevators that want to use space for corn and soybeans. We start to look around at what is going on in the world. We start to think about all the things that can happen to the winter wheat crop before spring. We look at world-wide supply and demand and remind ourselves that there is no more wheat until the Australians hit the fields late in our winter.

Somewhere in the process we made a low at 6.56-1/4 March Chicago futures, rallied slowly over 8 trading days to 6.90-1/2, then screamed higher. Overnight going into Tuesday we hit 8.09-1/2, which makes the move over $1.50. Where have I been while this was happening? Was there money to be made? Someone is cashing in on this.

Meanwhile, we have seen gains in the corn and beans. They are not steady gains, but steady by jerks. March corn futures had a low just back on November 23^rd of 5.20-1/4. Overnight we have traded 5.75-3/4, 55 cents higher in a few days. We closed the overnight session on the high. We are still a long way from the recent high of 6.17-1/4 posted November 11^th, but we are starting to think about a two-thirds retracement of the move lower. If we get that, we will get ambitions of one last leg higher.

The soybeans are a similar matter. The low was November 17^th at 11.75-1/4. The high was Monday at 13.06-3/4. That is now just 36 cents below the recent high of 13.48-1/2 back on the 12^th of November.

So, now we look for perspective. Are there fundamental reasons why we are rallying? There is nothing large that I notice, but I already admitted I have been asleep for a week. Or, are we just reacting to a big break lower that had little fundamental news to support it?

There is talk that the corn and bean carryout is going to continue to tighten. That is the kind of talk that helps a market retrace, but does not blow it out the top. I continue to view this market at a selling opportunity. These are historically high prices, having been seen only once before. The last time the cash buyers had to stop buying because they ran out of margin money to risk.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Small gains stabilize grain markets

Grain markets have stabilized on the Chicago Board of Trade in recent days. That is a nice way of saying that we have seen small gains after large losses, without a real sense of direction being established.

December corn futures have retraced nearly a third of the large loss. We fell from the high of 6.05 on the 9^th of November to 5.06-1/4 on the 23^rd. That is nearly a dollar in a few days, and it filled the gap on the chart. In the week since we have gotten back over 30 cents to the current overnight trading at 5.36-3/4, touching 5.45 at one point Monday.

January soybeans paint a similar picture. The high was on November 12^th at 13.48-1/2, but the close that day was the low of the day, at 12.69. so, we had nearly an 80-cent range for the day. The drop continued until the 17^th when we posted 11.75-1/4. That is a drop of nearly $1.75. A rebound took us to 12.62-1/4 on Friday. We are now trading at 12.34, which is up nearly 60 cents. That is basically a third of the drop, similar in proportion to the corn chart.

December wheat, meanwhile, dropped $1.43, but has been up 33 cents in small increments the last eight days. We are currently trading 6.50-3/4.

So, what do these market moves mean? It is easier to talk about them from a technical aspect than from a viewpoint of any real insight. Technically, markets tend to retrace one third or two thirds of their major market moves. That has now happened in corn and beans. We crashed, then bounced back about a third of the crash. So, from a technical standpoint we are now clutching at straws, looking for more clues. Will we see this more bounce? Will we make one more leg up in the markets?

To move higher requires some strong fundamental trigger, I would think. The adjustments we have made the last two months have been based upon the fundamentals of change in the estimated crop size and some tinkering with demand ideas. The next market mover on the calendar does not come until the January USDA Inventory Report, which pegs the final crop size. There could be a surprise, but it is hard to believe.

That means, if there is a fundamental trigger on the horizon, the next one we can count on is way ahead at the end of March. That is the Prospective Plantings Report. After that comes early spring weather concerns leading into planting.

There are things that can happen in the meantime that effect supply and demand, but they are windfalls, not calendar-based expectations. We can have political upheavals, such as an escalation of the Korea mess. We can have hiccups in oil production. We can have dollar-to-euro changes. None of these are likely, just possible.

So, expect that the market will change for better or worse in the spring. In the meantime, I don't expect much excitement. If this break holds, we can expect a slow decline in prices as we look for fundamental reasons why we should be historically high after huge crops.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Getting thrown by the urban cowboy market

The iconic movie of 2002 was Urban Cowboy. This gave us John Travolta posturing in cowboy garb as he hit the night spots in Texas. Central to the movie was the mechanical rodeo bull. I always wondered just how drunk you had to be to get on that thing.

Well, we in the grain business are hanging on with both hands to the mechanical bull market. It goes up, it goes down, and it eventually throws you off on your face. I remember the disfiguring bump on the nose of my eighth-grade basketball coach. He said he worked his way through college riding rodeo bulls. One night a bull threw him up, then jerked back up to meet him as he came down. The nose was the result.

My nose is a little out of joint as I watch price action on the Chicago Board of Trade ht last few days. I have been playing the sucker by trying to pick the top. In the process I have been right, then wrong, then really right, then really discouraged. Prices recovered a little Friday, but the last few days have defined a break in values that has corn down most of a buck and beans down most of two bucks.

I can now stop talking about the report gap on the chart. That gap in trading formed on October 11^th, after a limit up day the Friday before. USDA had changed crop production numbers down a little, and the market really over-reacted. Well, it seemed like an over-reaction, but since the trading stayed up for a month, I have to remember that my prejudices are not valid. The market is always right.

The gap on December corn futures was form 5.28-1/4, the high that Friday after a 30-cent limit gain, to 5.55, the low on the Monday trade. We traded above the gap for more than a month, making a high at 6.05 on November 9^th. We broke prices that day, however, closing at 5.76-1/4. Five of the next six days were sharply lower until we finally closed the gap on 11/16 with a trade of 5.25-1/2. The next day we put in the recent low of 5.09, vey close to a dollar loss in all. We are currently trading at 5.21-3/4.

The soybeans gapped, but only slightly. The corn chart almost always closes the gap eventually. This is not true of soybeans, and, in fact, the gap is still there. On January beans the gap was from 11.45 after a limit 70-cent gain) to 11.61. On the break last week, January soybeans only got down to 11.75-1/4. They are now 12.11-1/2 after a dime bounce overnight going into Monday's day session. On November 12^th, meanwhile, we made a contract high at 13.48-1/2.

Trying to track this after the fact is fairly simple. Trying to make sense of this price movement is like trying to anticipate whether the bull turns to the left or right. How much of the volatility is a result of unusual, large spec trades? How much is about the fundamentals of crop size and demand? How much is just the dollar going up and down and effecting our prices when the buying is done in Euros?

I think the same thing about dollars when I pump the Ford full of gasoline. In the last ten days I have paid $2.959 and also 2.729. Does it have anything to do about gasoline supply and demand? Or, is it just the dollar?

If you are sitting on a pile of grain and have watched $6.00 corn futures and 13.50 bean futures come and go, you have a lot of company. I cannot sit here and tell you those prices are coming back. It is easy to say that the current prices are still historically high. That is small comfort, and emphasizes the difficulty of marketing farmer grain.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Don't ask—I don't have a clue

I feel like I should just put a recording on my phone. It would be like going through the McDonalds drive-thru, where the two-way now starts with a recording. "Would you like to try our blah, blah, blah…" My message would say, "If you are calling to ask what the market is doing or going to do, I don't have a clue!"

This would be because, after the last few days, I really don't. Oh, I have had some rationalizations and some impressions and some occasional opinions. But, after The market made new highs, crashed the limit on corn, came back the next session with a near-limit move, then crashed overnight again, I give up.

This is no longer about the weak dollar or the dollar rebounding. It is not about hunting for a market level based on revised crop sizes. It is not about rationing demand, producing gasoline with five percent more ethanol content, or about the election. I don't know or care if there are machinations from Washington contributing to the general increase in prices. I hear the talk of a move to $4 gas a way of putting cap and tax in effect in a practical way without law, and I am unmoved.

Just give me a break. Just let me watch the market float to some kind of equilibrium. Just let things go back to some kind of stability where I can kid myself that I can make sense of the price movement.

The most cogent thing I have heard recently is that market-moving trades are entering the pits these days of a size that we did not used to see. A large number of huge trades are becoming normal. Over time, they have no effect, because the market determines price, not the traders. As we look at the short-term, however, the effects of large trades can be disturbing and confusing.

Look at December corn futures. Friday October 7^th saw a high of 5.02-1/2. Before the open the next day USDA revised crop production numbers. We were quickly up the 30-cent limit. The next trading day, Monday, we gapped (left a hole on the chart) to 5.55, then made a 5.73-1/4 high. The next four weeks of trading got us higher most days, but not by much. We made a contract high last Tuesday the 9^th at 6.05. It lasted about two ticks, and I never saw it. The close was down nine cents for the day, after the explosive, blow-off high, at 5.76-1/4.

After the high we traded down three days to 5.34. As this was going on, the talk was of a rebounding dollar. Friday we put in a low of 5.34, and were down the 30-cent limit. Monday we were up 21-1/2 and had a higher high than the day before. Now, on Tuesday in the early, overnight session, we are down nine cents again.

Talk about volatility. This is the volatility of a yo-yo. At least with a yo-yo, you know what will happen when the string gets unwound at the bottom. At this point we could be destined to break the string and make a new low, or to raise the hand with the yo-yo to a new high.

In the process, we have come close enough to filling the report gap on the chart that the market will be satisfied. This is a formation that either gets filled or makes an island top. Now, it looks like it is filled. The chart is free to continue lower, or to consider the last month an interesting interlude on the way to another leg up.

In the meantime, producers have to make decisions. The easiest one is to talk yourself into believing that these prices are higher than you ever expected. Reward them with heavy sales.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor: written 11/8/10

By Marlin Clark

Grains hang onto highs

Grain markets continue to confound observers as new highs keep flowing as combines keep rolling.

Corn, soybeans and wheat have all made new highs or returned to the high in the case of wheat. This is happening even as we are finishing harvest, a time normally of declining prices.

Take your pick of the reason. Is it enthusiasm for the new e-15 ruling? Is it yields less than forecast? Is it just the result of the declining dollar?

Most people feel the E-15 ruling did not accomplish much. The government is now allowing all gasoline to have 15 percent ethanol instead of the current ten. The problem with this ruling is that it does not even meet the "kiss your sister" standard. Is there anyone who believes that the oil companies will retrofit all their stations to have an extra pump?

E-15 availability will now depend upon a decision by marketers to find reasons to replace their E-10 with E-15. Even this requires expense for labeling and changing over to a new product. It will involve lower fuel mileage and marketing issues. For example, do they switch, then lose business because the public wants the old gas.

Then there is the yield forecast. I am beyond knowing so far what the crop really is, but it appears the market is apprehensive that the supply gets tight. Hence, the price decisions going on at the Board of Trade.

The declining dollar is a totally different issue because it does not involve supply and demand. When the government announced that it is going to print a huge amount of money just to increase the supply and make money more available to loans, It is announcing to foreigners that our money is not worth as much. As the price in Euros remains the same for our product, the equivalent price in our dollars goes up. This may feel like a rally to the American farmer. In the short run it is. But, it should not be confused with the fundamentals that determine price over a longer time. That is, I should not be looked at as a reason for higher prices, just an excuse. If the dollar stays low, it does become a long-term price factor, but all the farmer inputs go up in a percentage similar to what out prices do because our fuel, fertilizer, and steel are foreign.

Looking at prices, December corn futures make a new high on Thursday the 4^th at 5.95-3/4. That means some months were over $6.00, another huge benchmark. We had old high at 5.88 on the 13^th. We are now trading just below the old high, at 5.86-1/2 before the day session has opened on Monday.

January soybeans are currently 12.80-1/4, down 3-3/4 overnight. The high was Friday, at 12.90. We have been up nearly every day since the report gap on October 11^th.

December wheat futures got back to the October 11^th gap high, or close. This morning early we touched 7.39, with the last high at 7.39-3/4 after the USDA Crop Report. In between we declined to 6.65, nearly off 75 cents.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Corn and beans hold highs through harvest

In a move that defies the normal timing of prices, grain markets continue to hold at their highs as we finish harvest in this country. Soybeans made a new high on Thursday and Monday, and corn furutes traded back to a new high on Monday.     

What is going on? The harvest is huge, but the market still looks at demand being strong enough to handle the crop that has been downsized a little in two government reports. Combines roll toward the conclusion of the crop, but the rally cannot be said to be over.

This is the week we switch current bean marketing to the January futures, so the numbers seem higher, with a dime spread. January beans made a new contract high Thursday at 12.48-3/4. That was followed up by a move to 12.46-1/4, near the high, Monday. Currently we are trading up almost a nickel on the overnight, at 12.39-3/4. That makes cash prices most of a buck lower, but at historically high prices, and at harvest.

The corn futures spent the last three weeks trading above the report gap in a 15-20 cent range, but last week corn actually posted a new high in this market that I felt was mostly a soybean rally. December futures touched 5.90-3/4 on Monday, then traded down to close for the day at 5.77-1/4, down almost a nickel. Still a lot of volatility in this market! I remember the excitement the end of July when we broke the barrier into $4.00 corn. Then, the middle of September we broke into the $5.00 range. Now we are on the verge of $6.00, and we are still wrapping up harvest! I have now used up my weekly quota of exclamation points!

I have spent the last two weeks talking about an island top. That supposed island is now almost a month old, and is looking less like an island and more like just a continuation of the bull move. This is a big move and I have been anxious that we not be caught unsold. The higher it goes, the more I feel that way. In the meantime, every time a farmer sells me corn he feels remorse a few days later. The day will come when that is relief, as the market falls. Now, if I just knew when that day was.

Chicago soft red wheat futures have put in an uptrend as the beans and corn boomed. December futures have moved from a high of 7.39-3/4 on the 11^th to a low of 6.65 on the 22^nd to a high of 7.28 on Monday the first of November. There was not a lot of conviction at that high, however. The Monday close was back at 7.02-1/2.

Harvest of soybeans is virtually done in most of the country. There are still some around here, but they are going fast. The nation is at 96 percent harvested, up from 91 last week. This time last year we were only at 50 percent, but the average is 79. In Ohio we are at 95 percent, with 89 last week. We were at 81 last year at this time and have an 85 percent average.

The corn harvest is at 91 percent in Ohio and 91 also for the nation. Quite a change from last year when we were at 50 percent in the country, but 81 in Ohio.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Corn market steady by jerks

Picking the top is an inexact science, mostly defined after the prices go down and the top is apparent.

Regular readers have watched me struggle to study the price movements the last few weeks. I am glad to have been able to provide a little humor as you laugh at the struggle.

Once again it is Tuesday morning, and once again I am trying to pass on insight that I don't really have. Prices are sharply lower on the overnight trading, but does that mean anything? The corn has continued to trade above the report gap, but with weakness apparent on some days. Meanwhile, trading seems to be focused more on the soybeans, with trade there still in an uptrend.

November soybeans gapped from $11.35 to $11.50-3/4 the Monday after the USDA Crop Production Report. It continued an uptrend, making a double high of 12.23-1/2 on October 21^st and again on the 25^th. It is currently trading 12.12-1/4, down 5-3/4 overnight. Volatility is such that being a dime or so below the high does not mean anything.

It continues to amaze me that the big bean crop is being discounted into higher prices. On the one hand, these are great prices, and when they come at harvest they may be the high for the year. On the other hand, everyone is cautious about being short. Soybean futures have gained most of $2 in this month so far. USDA cut the production number a little, but this seems like a huge over-reaction. I have to remember that the market is always right.

December corn futures continue to consolidate above the gap. This so far continues to feed the island formation, which is a pattern of trades above the trend line, separated by the report gap, the blank spot on the chart left by the reaction to the USDA report. As discussed a couple of weeks ago, this can be a dangerous formation. We can fall back through the gap to sharply lower prices, or we can use this as a staging ground to go higher, and there is no island.

Prices have had strong volatility, but have stayed in a range of 5.50 to 5.85 for the most part. That is a big range, but price change means nothing within that until there is a change of direction. Prices are thus "steady by jerks."

Right now it feels like the beans are holding the corn up and the corn prices will fall when beans top out. Then again, I may be wrong.

The wheat futures continue to stagger along, held up by the other grains. They are forming somewhat of a pennant, as the trade volatility stays in the same range but gets smaller. So, we will see a trend change soon. That can be up or down.

This time of year the wheat gets ignored, as most elevators will not touch it while being buried in corn and soybeans. Farmers who are watching and wanting to sell next year's crop will discover that, in these times of margin call mania, traders are reluctant to book anything and basis is historically weak.

 

 

 

 

 

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Hunting the tops at harvest

Grain markets on the Chicago Board of Trade continue to hunt chart tops, even as combines roll. This defines the concept of "contra-seasonal," as we normally are weak at harvest.

Grain prices continued to press higher after the October 8^th USDA Crop Production Report. As discussed last week, that surprised the market with lower corn and soybean crops than expected. In the case of corn, the crop was cut four percent and is no longer expected to break last year's record.

Normally I expect a crop report to be a "one-day wonder." That is, we adjust prices based on the new expectations and go on. Sometimes we go higher with lower production. Sometimes we go lower with higher production numbers. Sometimes we go the opposite of the expected move because the change is there, but not as big as expected. Still, we correct in one day, then the trading moves on.

An exception comes when the surprise is large. In this case, markets were limit up Friday the 8^th, so all the pressure was not relieved. Since the report came on a Friday, the limit moves could have been considered an overreaction by traders not wanting to be exposed over the weekend. Fortunately, Columbus Day was not a trading holiday, which would have made the situation worse.

It would not have been a surprise to come back in Monday and actually trade lower. I expected to trade lower by the end of the day. I was wr..wr..wrong. Markets had follow through that is only now working its way out of the market, a week later.

Here on Tuesday morning before the day session has started, we are sharply lower on corn, soybeans, and wheat from the overnight session. December corn futures are off more than a nickel, beans are down 14 cents, and the wheat is off eight and a quarter cents. This is a nasty change in prices, and gets all three commodities to the bottom of the range traded since the report.

Corn and beans left large gaps in the chart by the spurt higher Friday. This gets the technicians a chance to get excited. We have now traded seven days above the gaps, counting the overnight Monday/Tuesday. If we should gap lower, we would have created a very dramatic formation—the island top. This is represented on the chart by several lines above the chart that look like an island, not connected to the rest of the chart. I would be extremely negative. It is also unlikely, given that the overnight did not start the gap, but has traded down into the gap, as did the trade yesterday.

Next in negativity would just be lower trading that would fill the gap. That is, a return to the levels we had before the Friday reports. That would mean we had absorbed the report and the excitement was over.

It remains to be seen where we are going, but the chart formation demands it be defined soon. If we turn higher without filling the gap, we have defined a bullish move instead of a bearish one. And, we have defined it at a "contra-seasonal" time.

Looking at prices, December corn gapped from 5.28-1/4 to 5.55 Friday, then traded as high as 5.88 on last Wednesday, the 13^th. We are now at 5.52, back into the gap. Soybeans gapped from 11.35 to 11.50-3/4 Friday. We hit the high of 12.04-1/4, a very high significant number. Twelve dollar beans! Now we are at 11.70, which is well above the gap. The case can be made that this is now a bean rally, and beans have not turned negative, since they are still trading above the gap.

The wheat was up 60 cents Friday to 7.39-3/4, but that seems to be just in sympathy to the other grains, and a mere blip on the slow stairstep progression to lower prices. We are now 6.81-3/4.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

The old gray mare has loped in

The old gray mare, she ain't what she used to be. You know the one—she galloped in and got you all excited about how fast she was, then ran out of steam. No she looks like a nag you were a fool to bet the farm on. She looked like Secretariat's great-granddaughter, but now you realize she was overdue for the Amish auction. (Maybe that was too obscure. Many of the Amish buggy horses come from racetrack auctions of horses that have run out of steam.

The old gray mare this week is the grain markets that have broken badly and are barely showing signs of recovery with small gains Monday and Monday night/Tuesday morning. Maybe "broken badly" is an understatement, Just how do you describe the market action that takes 72-1/2 cents off corn, 1.02 off soybeans, and 1.13-1/2 off wheat in just a few days?

This is a mare that stumbled in the backstretch, broke her left forefoot, and could not finish. No, wait, that actually was a horse in the Breeders' Cup a few years ago! They put a tent around him for the sake of the queasy onlookers, put him down, and carted him away. Not a pretty sight. About like trading grain the last few days. Some days I am glad I am working in the "tent" of my office and not in the pits in Chicago in front of God and everybody.

In case you were running beans and missed it, this is a market that will be remembered for awhile. In fact, it will be some time before we have a coherent reason for the break. That is my challenge this morning.

First, look at the prices. We always say that a high price at harvest is the high for the year. That was true until two years ago when the reality of ethanol demand kicked in and gave us a higher market after a high harvest.

Right now you can make a case for a harvest high right at the start of harvest. December corn futures rallied after the government Supply and Demand Reports of a week ago Thursday. The high came the next Monday, with December corn touching 5.28-3/4. First we had looked for the any futures to touch $5 as a landmark, but the market did not immediately collapse when it happened. The trading held on until all the contracts were well over the benchmark.

Then, the selling kicked in an accelerated. Monday we closed down nine cents on the day, and 16 cents below the high. Tuesday we actually gained a nickel, as traders took the adjustment into consideration. However, Wednesday the contract was down nine and a quarter cents, and that led to the limit-down 30-cent drop on Friday.

We made a low Monday at 4.54-1/4, and I think it was in the overnight trading. Hard to keep track of these quick adjustments some days. Whenever, that represented a high to low of over 72 cents in a few days.

Similar action in the beans dropped us over a dollar., to a November futures low of 10.42. We are back to 10.60-1/2 in the electronic trading early Tuesday. The wheat appears to be a different matter, with fundamentals there not suffering the surprises in the other grains. The chart looks flatter. Look more closely, however, and that is just because the high at 8.68 in early August has compressed the chart. Run the numbers and wheat has lost more than a dollar since September 20^th.

Pick your reason for the drop in corn. USDA came out with a Grain Stocks Report that showed 1.7075 billion bushels left over on September 1^st. That is several hundred million bushels higher than trade guesses. Analysts immediately discounted the number, and maybe even trading those feelings for two days. The argument was that we had an early start to the harvest, and that meant we had a goodly amount of 2010 crop corn counted as carryout of the 2009 crop. Two days later the trade started trading the USDA number.

Then, the corn harvest so far appears to be confirming the USDA record crop projections. The traders were convinced USDA was too high, but they are losing their nerve.

Then, there is just the contra-seasonal impact of the market. It is the wrong time of year to rally corn, and the pressure of harvest helped break prices.

It remains to be seen if the high is in. If it is, most farmers are way undersold. Traders talk of this percentage and that retracement. No heroes have emerged to swear that this is just a hiccup.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Whoa, baby! Hot! Hot!

One of our family stories involves number one son in a restaurant tasting his soup. The attractive girl going by our table was surprised to hear a 12-year old blurt out, "Whoa, Baby, Hot! Hot!"

I thought of that yesterday as I watched the attractive corn prices go by my screen. I have to admit to surprise checking the overnight trading and seeing a quote over $5.23 per bushel. Whoa, Baby! Hot! Hot!

The speculation for the last few days and the last thirty cents has been if we could break $5. When we got to 4.70, we were looking for a break, but the market watchers were speculating that we could go to 5 just because it was there and we were close. So, we made a run at the $5 and hit it overnight going into Monday. We not only got there, but we got a little momentum, maybe from hitting buy stops set by speculative traders, and spurted nearly 25 cents higher.

So, now we are looking for direction. The magic number has been hit. Last week the idea was that we could touch it, then crash lower. Yesterday the talk was that we could go right to %.50 with the momentum we had. In fact, early trading took the overnight prices lower. By the end of the day we closed down a nickel. The overnight into Tuesday as this is written is not quite even, at 5.07-3/4 December Chicago futures.

At the same time, soybean futures were also higher on the overnight going into Monday. We gained over 66 cents from the Thursday low of 10.33 November futures to the Sunday/Monday overnight high at 10.99-1/2. For all intents and purposes that is the staggering target of eleven dollar beans, and represents an on-farm price of ten dollars or so—maybe more, depending how close the producer is to a processor.

Since the high we have drifted lower, but still posted a high overnight going into Tuesday of over 10.93 November and a close before the day session of 10.86-1/4. We are up not quite two cents as we wait for the open.

This action on the grain markets defines what we call a "contra-seasonal" market. That is, the seasonal history is that prices decline going into harvest, but we are seeing improvement. The reasons for this continue to be the same as we have discussed for the last few weeks. First, the market is not convinced that USDA's record corn crop is actually there. Second, the market sees exciting demand in worldwide markets.

Demand from Europe has been the dominant feature of those who say the market is now demand-driven and not supply-driven. We are shipping corn east to replace the feed grains that were not grown in drought-ravaged Russia and Ukraine. The exports that the FSU would normally push into Europe are going to come from us instead.

Hidden in the demand picture is another factor that may be driving prices. The rumor abounds that this week Ag Secretary Vilsack will announce E-15. That is, blenders will be allowed to sell gasoline that is 15 percent ethanol instead of ten percent. It remains to be seen if this is just a rumor, although the ethanol people have been promoting it for a couple of years, ever since they got enough capacity to get to ten percent in all gasoline. It also remains to be seen if it is a cause of the current rally.

While futures prices are moving higher, basis is dropping as a reaction, and as we make the transition to new crop. Silos are full of high moisture corn, and combines are turning out corn in the low 20's in our area. Bean harvest is in full swing. Yields are what have been expected. That is, there is huge variance between farms. I am hearing of 77 bpa beans, but beans that are only 18 inches high from moisture stress only a couple of miles away.

So, the trend remains unknown, and prices are volatile. The rule of thumb is, the high price at harvest is the high price for the year.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Another Tuesday, another confusing turnaround

Once again it is Tuesday morning and I am trying to make sense of an exciting week. Once again we have made new highs, then traded lower in the overnight electronic session ending early Tuesday morning. Once again I get to say what is going on without really knowing. Just like everyone else you read, only I admit it!

Grain markets have decided to trade the Friday USDA reports as bullish, even though the news in them was already being traded. The result is a run at $5.00 futures on the Chicago Board of Trade. July and May contracts each had highs Monday at $5.02. December futures hit 4.86-1/2. This was 16-1/2 cents above the Thursday close, and 22 cents improvement in ten days.

The USDA Friday before the market open released several reports. They now say our corn crop will be 13.2 billion bushels. They reduced the guess 250 million bushels, but this would still be a new record. It would break the 2009 record of 13.1 billion bushels.

Just think about this. We are having two record crops in a row, if USDA proves correct, and yet we have surged prices to near $5 levels. What gives? Hate to repeat, but the fundamentals and the emotions remain the same in the pits. First, traders are not convinced the bushels are there. They think the crop is smaller than the USDA numbers. The, we have a demand-driven market. That is, the market is more concerned with how much corn is needed than how much we can supply.

The demand side has been driven the last five years by ethanol demand. We have continued to ratchet up acres and total corn supply and the market has responded with higher prices at the same time. This year the increase in demand is helped by Russian wheat problems. A significant portion of their wheat crop comes back into the EEC countries as feed wheat. That will not happen this year, given the small wheat crop due to record drought. This year the Russians will eat the feed wheat.

The response to the need for feed was the EEC deciding that maybe they could feed our "Frankenfood". That is the derisive term for crops grown from Genetically Modified Organisms (GMO). The greenies there had shut off imports of our crops when we "contaminated" supplies with GMO's. They believed that it was not nice to fool with Mother Nature, and the grains would not be safe.

Now we are way past contamination, and the bulk of corn and soybeans come from GMO seed. This has been a boon for production, but has limited some exports. Now the Europeans are hungry, and they have approved six varieties of corn for import, and have imported the first vessel.

This is very good for the future. For now, it is supporting prices in another big-crop year.

The mood in the pits has been less than euphoric, but has mainly expressed the reality that traders will want to run at the $5 level now that we are close. Talk has been that we could hit that, then crash. Now we are studying the reality of what does a run at $5 mean? If it is in any month, we are there, and this is Turnaround Tuesday. If it needs to be in the nearby month, we have one more leg up to gain. So far I am not hearing talk that the bounce lasts beyond that.

I am reminded of the comment of one trader three weeks ago, however. He said that, whatever low we made (which we made shortly after his comment), it would be the long term low. Prices would stay above that for a long time.

Maybe so, maybe not.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

The fat grain buyer is quiet

Bill Barnett says I was wrong about my thinking last week. I said, "It's not over until the fat farmer combines!" Meaning, the market top is not in yet. Bill says it's not over until the fat grain buyer sings, and I'm pretty sure he was talking about me.

Now, Bill was at my karaoke birthday party last summer. He knows what everybody who has seen me in the last thirty years knows, and he has also seen me sing. And, he is right—I haven't been singing. Oh, I keep chirping about the high being in every time we get a peak in prices. Then, we trade off a few days and come back to make new highs in corn. No singing in there anywhere.

Once again this week we made new corn highs. Once again as we go into Tuesday morning the overnight is sharply lower, and I start thinking the top is in. I'm not singing about it, however. Is this a mood change, or just a knee-jerk reaction to the highs we put in on Friday, when we were worried about the long weekend?

Friday corn made a new high at 4.67 December futures. We saw a 21-1/2 cent range and closed 17 cents higher. This leaves me scratching my head, as the end of the rally is frequently the biggest day. So, was this trade a reflection of the long weekend, a blow-off top, or just one more big day up?

It is no surprise that Tuesday morning, as this is written, the December corn futures are down 5/1/4 cents. Interesting to note, however, is that we actually made a new high on the overnight, at 4.69. Just to prove my humility, or to make an attempt at it, I should point out that when we made the spike high on wheat overnight on the 5^th I said that the sympathetic corn high was phony and would remain the high, at 4.38-3/4. So far I am wr, wr, wrong, by30 cents.

Chatter from Chicago this morning is about the near-record long position of traders in Chicago. This is the biggest number of long contracts and options in two years. That is an indication that the bull really needs to be fed, and that we are running out of the ability to trade longer forever. We could trade this as a long-term high, or it could be another stepping stone. Advice from the floor this morning is to use puts to protect against prices falling.

While corn has made new highs, the soybeans have not. Beans have traded in sync with corn, but without as much volatility. Thus, soybeans were up 26 cents overnight going into Tuesday, but the high was 10.41-1/4, still off the 10.49 spike high of the 5^th. The overnight session close for the November futures was 10.35.

Wheat futures continue to look for direction after the precipitous breakdown in prices the 6^th of August. Remember that we turned around $1.20 at one point that day. December wheat futures are off 12-1/4 overnight. We are 7.29, $1.39 off the high. The good news is that we have bounced 52 cents off the bottom.

Traders continue to be focused on crop news as they try to determine what our corn, especially, is going to turn out. A remark heard this morning was that USDA might raise the corn yield number, but the trade would not believe it. The bias in Chicago still seems to be that the corn crop is suspect, and demand is going to be more than allowed so far in the USDA Supply and Demand Report. Consequently, the market is still bullish.

And, I am holding off on the singing. Of course, when I do sing, it will be the traditional call of the grain trader. That is Ray Orbison's "It's Over!"

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

It's over when the fat farmer combines

Forget the fat lady singing. It's the fat farmer you have to be watching. They are not all as lean as Dean Miller and John Wallbrown.

This year all the yield guessing and market watching comes down to what happens when the fat farmer runs his combine. Either he is surprised for the good or surprised for the bad or he is satisfied he was right all along.

Well, "satisfied "might be an exaggeration. It kind of goes against type. Pappy always told me, nothing was ever any worse than a farmer said it was!

I say this as an observer who has been trying to pick the top of the corn market for a long time. Every time I look at the chart and tell you we just saw the top, we dip a little and come back. Monday we broke through the phony high made two weeks ago when the wheat futures were limit up overnight. At that time I said that the corn only made the December futures high at 4.38-3/4 because it was pulled up when the wheat was locked limit up. I said it was a spike that would show on the chart for a long time.

Well, Monday we broke to a new high, at least for more than a year, of 4.45-1/4. We traded above the spike on three different days. The overnight close going into Tuesday trading is at the last high. So, what is happening?

It has to be that the market is still uneasy about the crop size. The southern states are harvesting, and many places have record yields. Mixed in with them are scattered reports of results sharply lower than last year. No trend is in sight. Get the farmers moving in Iowa and Illinois and we will start to have some confidence in the outcome.

You have to love the mood changes in the markets. Early this season all the talk was that the record early planting would result in a record crop. Now, with harvest at hand, I read a report this morning that the early harvest was because of leached nitrogen in all the rains. My opinion is that the early harvest is because this year, when we planted early, we also got warm weather in May. The corn grew all month, and the early planting meant something. The growth in May was a result of heat units, and the total heat units determine harvest date.

So, it seems we are making highs just before harvest and positioning ourselves to have a bust in prices. Make that a Pamela Anderson bust in prices—phony and inflated with anticipation, smaller than expected when all the market news implants are taken back out.

Looking at prices, The December corn futures demonstrated pre-harvest volatility with a high of 4.37-1/2 on the 19^th, then a low of 4.15-1/4 on the 24, followed by a high Monday at 4.45-1/4. Down 22, up 30 in a short time.

While that was going on, the beans finally put in a dip after a long uptrend.The November futures high was at 10.49 on the 5^th of Aug. Since then we have seen a low of 10.11-1/2, a high of 10.48-1/2, a low of 9.93-3/4,a high of 10.34 on Monday, and are now trading at 10.13-1/4. A lot a volatility without a new high like we had in corn.

The wheat, after the big break, has been sideways, with significant range some days. We broke from 8.68 December futures the overnight of the 6^th, to 6.88-3/4 on the 18^th. Last night we finished at 7.02-1/2.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Rain markets break from highs

Prices on the Chicago Board of Trade have broken sharply on the overnight trading going into Tuesday morning, as this is written. Corn, soybeans, and wheat have all traded dramatically lower, leaving the highs of the last few days behind.

I had to do some quick mental calculations when K-2 called from the Farm and Dairy for my prices this morning. We publish prices based on the close of trading at 2:15 EST Monday. Those have now gone away. On Thursday the readers look at those prices and have to be reminded of the disclaimer that the reader has to confirm them with the buyer.

K-2 is not to be confused with the second highest mountain in the world. That is the sobriquet I give Kristy Foster, the second reporter of that first name name at this paper. Thus, K-2, get it? Did the first one spell it Kristi, or is that my imagination?

So, this morning corn is down almost eight cents, the beans are down seven, and Chicago wheat is down more than 12 cents on the lead month. K-2 wonders if I know why. I wish I did.

The easy answer is that the USDA Crop Progress Report out Monday reinforced in traders' views the idea that the corn and bean crops will be records. The corn progress is still record early, and the bias is still that an early crop is a record crop.

USDA says that, as of Sunday night, 88 percent of the corn is in dough stage. Ohio is rated at 91 percent, up from 82 last week and way ahead of the 71 percent of last year. Crop reporters admit that there are a lot of holes in some fields, but they are confident the bushels are there. This week, it is hard to argue against that.

The thinking is then that we have good demand, but maybe not enough to support the current prices, so let's break them a little. Prices were supported by the stronger dollar, but that has gotten weaker.

December corn futures rallied to the spike that the wheat rally caused. That was 4.38-3/4 on August 5^th. We broke to 4.10 in six days, but rallied back to the high. Dec corn traded 4.37-1/2, 4.37-1/4, and 4.37-1/2 on Thursday, Friday, and Monday. Take a look at the chart—that makes a strong argument for a top after the break to 4.22 overnight.

Things are similar over in the bean pits, er, on the bean computers. This electronic trading has me wondering what the Board of Trade looks like these days. The beans had a 10.49 November futures high, then broke to 10.11-1/2. The bounce was right back to 10.48-1/2. Now we have traded lower three days to the overnight low of 9.96. Again, this looks like a top.

The December Chicago wheat futures came screaming off the 8.68 high of the 6^th to hit 6.77-1/2 on the 18th. We are now trading 7.14 again, with no idea of a return to the highs.

Make your arguments. What could happen this late in the season to give us new highs? Only a serious surprise in yields at harvest, which is just around the corner for some areas. What could give us sharply lower prices? Confirmation that the uneasy fears that have supported the market are unfounded.

That is the long version –my attempt to explain the break this morning. The short version is simpler.

When K-2 asked why we were lower, I said, "I don't know.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Volatile markets seeking direction

Volatility, by definition, is a measure of price movement versus time. The more price moves in a given time, the more volatile.

We are currently seeing increasing volatility in all three major grains as market uncertainty and topping action is defined. Fundamentals are somewhat uncertain, leading to divergent opinions. The excitement of a historic wheat rally has faded as traders are deciding if the rally is over or merely taking a breather.

"Breather" would be an understatement of the December wheat futures contract, where prices broke over $1.80 a bushel in ten days. After the high of 8.68 in the overnight hours going into Friday the 6^th of Aug, we traded 6.87-1/2 on the 16^th. The bounce to the overnight of 7.06-1/2 going into Tuesday as this is written does not amount to much. We have been up and down several days reaching this price, and we are up a dime Monday night as we wait for the market to open this morning.

It was exciting while it lasted. If it returns it will be exciting again. As usual, prices went down faster than they went up, and the downward moves are the gut-wrenching ones. December Chicago wheat gained nearly $4.00 in two months, but lost almost half of that in ten days.

The corn and soybeans have become more volatile as they also made highs. They are both still trading near the highs, however. Corn futures were trading in two-week cycles, but near the top got into cycles of a week or less. The soybeans had a long, one-month cycle, then had two very quick one-week reations.

December corn futures had a low the end of June at 3.43-1/4. The high was made a little more than two weeks later, at 4.10 on July 15^th. Two weeks time got us back to 3.76 on the 27^th, but by the 8^th of August we were back to the contract high of 4.38-3/4. By the 11^th that was 4.05-3/4, down 33 cents, but we bounced back to 4.33 by Monday the 16^th. Overnight Monday/Tuesday we are at 4.23-3/4. The pattern of quicker cycles is evident in the last few weeks.

November soybean futures are different in that the long cycle to the top was very steady, more like the wheat charts. July 1^st showed us a low of 8.94, and the high of 10.49 took more than a month, to August 5^th. We broke prices 20 cents in a week, but rallied back to within a half-ent of the high on the 16^th, Monday. Currently the November contract is at 10.35.

It should not surprise you that traders are looking at the charts and trying to decide how to trade. It is too late in the summer to do major damage to corn. It is late for beans, although some surprises are possible in both. I am wary of the beans, where farmers tell me of crops that look great but have two beans in every pod. It is hard to count bean yields by walking fields and it is impossible to judge them from the road.

The wheat was early, and there is a lot of early corn and beans. The bean crop was stretched out by May rains so that harvest will start early, but be stretched out.

This may help corn by supporting basis, or the market may decide the crop is so big the length of harvest does not matter. This may be the year that the early corn is left in the field to dry for free. It will be tempting to run the combines long enough to tune them up and open up fields, then to not get in a hurry.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

 

Wild and wooly market hard to track

In the old cowboy song, "I'm wild and wooly and full of fleas, and hard to curry below the knees…" That pretty well describes the Chicago Board of Trade recently. The wheat rally which has driven this market stuttered overnight going into Friday, then staggered and collapsed Friday. The result was a $1.20 turnaround in a few hours, and less hair on the head of every trader following these markets.

September wheat futures were up as high as 60 cents in the overnight, the daily limit. When trading opened Friday morning they quickly went from up 30-something to down 35, then slid on down to minus 60 cents. Since then they have traded up and down a little, but as this is written before the morning open Tuesday we have September futures at 7.04-1/4, well off the 8.41 high of the Thursday-Friday night session.

So, the party appears to be over, or is it? Is this just the break to get new buyers in, or get the old to return? Was this just serious profit taking? All this remains to be seen, as the stomach turns.

The thinking on the way up was that the wheat was pulling along the corn and beans. Not so, if you watch what has happened since the wheat break. Corn and beans have held most of their gains, until a significant break overnight going into Tuesday. As this is written, the corn is off six cents, and November soybeans are down 12 cents.

Farmers who were smiling briefly over spotty rains ten days ago are back worrying about crops. There is still a long way to go to make the near-record crops traders have plugged into projections. Does that mean that this concern is already expressed in the supported prices that wheat dragged up? Do we stay near the top on weather concerns? Do we break as we trade the last production reports? Do we make new highs on hot and dry weather?

Some or all or none of these things will happen, and that is as definitive as I can get! It's like answering a question with, "yes, no, or maybe."

Looking at the prices, September corn futures had the big low of 3.33-1/4 the end of June. We had a July 15^th high of 3.97-3/4, then a July 26^th low of 3.61-3/4. Thursday the high was all the way up to 4.25, on a daily range that day of the 30-cent limit. We are now at 3.97.

November soybeans had the big low July 1^st, then climbed in steady increments to the Thursday high at 10.49, up 1.55. We have eased off 26 cents to 10.23.

September wheat had a June 10^th low of 4.43-1/2, and a high of 8.41 on Friday. Just that fast we are at 7.04-1/4.

The end of that cowboy song is, "I'm a she-wolf from Cripple Creek, and it's my night to howl!"

There will be a lot of howling before this summer's grain markets are done.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Turn around Tuesday may bite us today

Turn around Tuesday may bite us in the behind today. Here a few minutes before the open of trading Tuesday I am looking at the charts and thinking we will at least take a pause in the market action that has given us new highs in corn, beans, and wheat.

I cannot escape my notice that the big gains during the day Monday that capped off a few days of frantic trading did not hold. By the close the prices were actually lower, and posted technical warning signs.

A couple of definitions would help here. When we look at the charts, we are doing "technical" analysis as opposed the the "fundamental" analysis of studying supply and demand. One focuses on the appearance of the charts, one focuses on whether the supply of grain or the perceived and anticipated supply is properly reflected in current and deferred prices.

Next, we frequently look for indicators that trends are changing. One is the "key reversal." In this, the high is higher than the high of the day before, and the low is lower than the low of the day before. This is a very strong signal of a top. Not so strong, but significant is the "outside day." In this, the High is higher than the day before, but the low is lower than the close of the day before.

Monday showed us an outside day in the September and December corn contracts. The December corn closed at 4.06-3/4 on Friday. Monday it traded a range of 4.03-1/2 to 4.18, and closed at 4.18. The lower low, higher high, and close below the previous close makes it an "outside day."

The November beans had a remarkable range, but managed a close above the previous day's close. The close Friday was 10.05. It traded Monday between 10.01-1/4 and 10.29-1/2. It closed at 10.10, though, above the previous close. Still, the move felt negative, and there seems to be follow-through on the Tuesday overnight trading. All the grains are lower going into the day session Tuesday.

As this is being written, the market has opened, and prices are not as bad as the overnight closes. However, December corn is down two cents at 4.02, November beans are down 3 at 10.07, and the September wheat is off 4 at 6.89.

This market has been following a weird combination of weather, supply of wheat, and outside markets. The combination has made it hard to make sense of any daily move. Wheat has dominated, with a move of $2.69 up since the end of June. That move has been steady and dramatic. This is the first break, and we are watching it closely.

There is an ebb and flow to the markets that seems to result in changes of direction frequently on Tuesday. That pattern is holding today, but we don't really know if the trend is changing until it has for a few days. That can be frustrating, but the successful futures traders don't follow the same rules as cash grain people. Futures traders follow the markets. Producers and users are always trying to anticipate.

The weakness overnight is accelerating as this is written. Corn is now down a nickel, beans down 11, wheat down 16 cents. We will be able to explain all this in some reasonable manner that may or may not be true when the day or the week is over.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Looking for Mr. Goodbar Chart

The confusion that is price movement on the Chicago Board of Trade these days is only heightened by study of our modern brand of tea leaves or chicken entrails—the bar chart.

Yesterday I was looking at the September and December corn charts and thinking they looked like a head-and-shoulders top had formed. This is a very strong pattern that has a right and left "shoulder" and a head. It signals a very strong topping sign, and portends a strong move back down.

That was yesterday. Today, Turnaround Tuesday, I am looking at strong overnight markets that have prices up a nickel on corn and beans, a dime on wheat. So, what goes? Is this just a blip on the chart, or is the trend not established? Let's look back.

Wheat has been the strongest chart, and does not show a strong topping action. September Chicago wheat futures had a low clear back in early June at 4.42-1/2, then rose steadily to the July 22^nd high last week at 6.10. Quite a move! We are still trading 5.98 this Tuesday morning after a break Monday to 5.84-1/2.

September and December corn charts are very similar, so let's look at the December. There we put the low in on June 29^th at 3.43-1/4. Early the next day we were a quarter of a cent higher, then started a big rally. The high was actually two weeks ago, posting a 4.10 on July 15^th. Since then we broke to 3.76 on Monday, but have bounced seven cents off that overnight.

November soybeans are in a similar move, but with bigger swings. On July 1^st we had the low at 8.94, then rallied nearly a dollar to 9.92-3/4 by the 16^th. In the next ten days we lost a third of the gain, making a low Monday at 9.61. We bounced 11 cents off that this morning late in the overnight session.

The corn especially shows a head-and-top formation, but the overnight violates that. This makes the day trade Tuesday very important. Chatter off the Board this morning before the open is that the market is trading the expectation of a big crop against the strong demand for the old crop. The current demand is known, the big crop is not. That makes it easy for strong demand to drive the market in spurts for awhile.

The USDA Crop Condition Report has the maturity as measured by silking ahead of normal by 14 percent. This seems to continue to confirm the trend toward a big crop. The market continues to believe that an early crop is a record large crop.

The conditions around my world are improving, with some timely rains of more than two inches total in the last week after a week of hot weather and curled leaves. Current forecast expect rain over the Midwest this week, but hot and dry weather ten days ahead.

So, all that to say there is uncertainty in the markets, and that results in volatility. I have listened over the hot line this morning to one man looking for a corn rally back to 3.95 to 4.05 December futures. We are now 3.82-3/4, up almost five overnight and 15 minutes to the morning open. At the same time, another analyst from his same company just said he did not look for the rally to be strong or to hold. You pays your money and you takes your chance.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Obstinate and opposite market

I am thinking this morning that the grain market is like a sixth grade boy this morning—obstinate and opposite. Whatever you suggest, he wants to do the other thing. The more you push, the more he pushes back. Too old to spank.

Think about it—we came out of reports that said we planted four percent more corn acres and four percent more bean acres and we made new highs. We started to dwell on tough growing conditions and locally poor stands, and we started back down.

Last Thursday we made a new high on December Chicago corn futures at 4.10. That was nearly 77 cents above the June 29^th low. The move was exciting, and short. It was also short-lived. Three ugly days have us back down to 3.88 on the Monday/Tuesday overnight. That is 22 cents off the high, and counting.

Similar action is seen on the November soybean chart. The low there was on July 1^st, at 8.94. We gained most of a buck, to 9.92-3/4 on Friday the 16^th. This Tuesday morning we traded as low as 9.66-3/4 again, 26 cents off the low in a day session and a night session.

Haven't had enough to make your Wheaties taste dry? Look at September wheat futures on the Chicago Board of Trade. The low was made clear back on June 9^th at 4.42-1/2. We rallied an incredible $1.56 to the Friday high at 5.98-1/2. Monday and Monday night we lost 24 cents off that.

At the same time the markets are going down, the chatter coming out of Chicago is that the crops are at risk to high temperatures and lack of rain. Also, the stands are not that great to start with.

So, it seems prices are not following what we are observing, but are going the other way. Trying to rationalize that is difficult, but I will take a shot.

Timing is everything. What we conclude may be already in the market, or the market may be late reacting. As producers were looking at the increased acres in the USDA reports, traders were looking at surprisingly reduced grain stocks in the same reports. While producers were worrying about corn curled up in the fields, traders were saying it was too late to worry about a big drought.

At the same time, the outside markets were turning against grains. After a long period of the dollar gaining on the Euro, the Euro fought back this week. It is gaining again, either as a rebound, or as a change in mood. This hurts exports.

So, decisions are hard to make. I think the market returns to worrying that the record yields predicated on record early planting are suspect. Here in Wayne TWP we have had rain forecast nearly every day, and continue to have it forecast for five more days. So far that has resulted in the tease of three ten-minute gentle showers in two days. The only thing growing in my lawn is the plantain.

No farmer is going to sell corn until it actually rains a lot.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Yo-Yo market comes back

Somewhere is the dresser drawer is still the Duncan yo-yo I used to play with. Not when I was a kid, mind you. That disappeared somewhere in one of my mother's housekeeping. This one was given to me one Christmas a few years ago by my kids. I immediately showed them how to go "over the falls" and around the world.

The joy of making a yo-yo do what you want is that you decide what you want. The last few weeks we have had a yo-yo market and we have had no control over it. Market analysts sit and ponder reasons for the recent moves after the fact. After the fact we can always make sense. Predicting the future is a different story. We don't want readers and customers to see the ugly side of the business—the tea leaves and the chicken entrails.

Stirring through the entrails this morning we see the excitement of new highs in corn, or highs confirming the May high, depending upon how you look at it. And, we see two days of easier markets as we decide if this is a bullish market or just a correction to an untimely downturn caused by actual fundamental information instead of tea leaves.

The fundamental information came in the form of the USDA Planted Acreage Report and the Grain Stocks Report. We also had world-wide stocks and other things going on, like the export inspections reports.

Aligning the reports with the results in the markets is harder than just reading them. Looking at the prices is the beginning point.

September corn futures made a high back in the middle of May at 3.91. Since then prices have been consistently lower, hitting a low of 3.32-3/4 on June 29^th and confirming that low on the open of June 30^th, at a half-penny higher. Then, prices got interesting as corn reacted to USDA reports by finishing nearly 30 cents higher, at 3.63-1/4. Follow-through the next few days led to a triple top. We hit 3.86-1/2 both on July 8^th and July 9^th, with a 3.86 even on July 12^th, Monday after the weekend. That high broke down Monday, with a 3.79-3/4 close, and we are more than a nickel lower at one point overnight. Currently, before the open Tuesday we have 3.77-1/4.

USDA now tells us that corn acres are up two percent over last year, to 87.9 million acres. 250,000 of those increased acres are in Ohio. They also say corn stocks are up 1 percent. So, where in the tea leaves can we see a reason for a return to the highs in corn?

The reason has to lie in fear that the crop size is overestimated. We started the year locked into the idea that our record fast corn pace, which slowed in Ohio in the middle of May, would guarantee a record crop. Right now the traders seem to be letting corn follow soybean gains, and to be worrying about the current condition of corn and coming weather.

Depending where you look, the corn looks rough. Holes, yellow spots, up and down fields are prominent. Then again, you can talk to farmers in NW Pa who say a little rain now would give them record crops. It is hard to get a consensus. What we do have is a ten-day period forecast to be hot and dry, and that may define things for awhile.

USDA says the bean plantings were also up two percent. If you are wondering how this is possible, the wheat acres are down eight percent, to 78.9 million acres. That is the lowest since 1971, while the soybean acres is a record. USDA also had the bean stocks down four percent.

The beans have been in tight supply to the processors, and the drop in perceived supply contributed to a big price move, regardless of acres. November futures gained almost 67 cents, to a Monday high of 9.60-3/4. We were 14 cents off that last night.

The big mover has been wheat, where reduced acres and poor quality pushed prices up most of a buck. The June 30^th low of 4.56-1/2 became the July 8^th high of 5.49-1/2. We are now 18 cents below that.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

 

 

Market Monitor

By Marlin Clark

Lack of insight, but not opinion

I was reminded this morning that when it comes to really knowing what is going on in the grain markets, I am as useless as certain vestigial mammary organs on a male swine. Maybe you have to think about that for a moment. I cleaned it up a little for the "General" audience. In fact, at various times in my life certain companions have suggested that I am a male swine, but that is another story.

Perhaps I thought this as I studied charts getting ready to write this, and noticed that I was long a little corn and short a little beans at just the time that corn was going down and beans were going up. Surely, if I knew what I were talking about, I would just sit here and play the market and get rich and work for myself.

In fact, I tend to be one of the most disciplined cash traders I know. I try to stay even the market, not betting on price movement but on my judgment of basis improvement. My judgment fails me now and then, but my price guessing is nearly flawlessly wrong. Put money on the table, and my nerves sue for peace. Peace to me is staying even.

My new quote system includes a voice service that has people in Chicago breaking in whenever they please to tell me what they know about what is going on in the markets. I am starting to think that they have to do this on some schedule whether they really know anything or not. I only have to do that once a week, and I don't interrupt Laura Ingraham and Bill Bennett to do it. That is what is playing on my computer until the experts break in.

It is a hard life being an expert. You have to have an opinion for why the market is doing what it is doing, a prediction for what it is going to do, and an explanation for why your previous opinion is not working out right now. Occasionally you get to brag about being right.

When reasoning about the grain markets is not working, you blame it on outside markets. This is what I have been doing for a month, while Greece, and then Spain, and then Portugal have been melting down their economic reputations. This has hurt the euro, helped the dollar, hurt exports, and given us all a reason for grain prices to go down when we thought they should not.

Now, just when I am tired of that argument, and tired that it is correct, things change. It is bad enough that our own economy is crummy. We get tired of having grain prices be at the mercy of every whim of every country. Why does this thing about being a world economy seem to impact on agriculture the most? Where is Earl Butts when you really need him? (He preached that we should plant fencerow to fencerow because we could not keep up with worldwide demand. Then we did, and found out that the world was hungry, but the hungry did not have money to buy our grain, which there was now too much of. Then came the 80's, when we traded in the Earl Butts farmers for younger, smarter ones who bought our equipment at penny auctions. Maybe that was just me…)

So , this week we traded grain on grain fundamentals for a change. At least that is what we said when the week was over. Soybeans were higher, and they should have been. There is some idea that all the acres are never going to be planted, and USDA tells us that the exports are for the year 21 percent ahead of last year and 7 percent ahead of projections for this year. The Delta beans are starting to burn up.

Corn gained over 30 cents before an eight-cent fall back Monday. Maybe this was a backlash to talking about Europe too long. Maybe it was just too much rain. You know there is too much rain when analysts keep saying, "It is not like 1993!" Well, I hope nothing is ever again like '93, when the Big Muddy got ten miles wide here and there. It is wet enough to hurt the crop, though, and severe storms are supposed to be widespread this week.

Wheat futures have perked up for ten days, which is by definition a contra-seasonal rally. It is harvest, and harvest is slowed by rain. Test weights are going down on the hard crop. The soft crop is getting ready for harvest, and we are starting to worry about that quality. Wheat was invented by God for dry regions, and Ohio is not one of them.

Maybe trading outside markets was more fun.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Dead cat shows signs of life

Last week I mentioned the old saw about the dead cat—that even a dead cat can bounce a little. That was in response to the idea that the market had gone so low, a little bounce did not mean anything.

The bounce has now lasted for a week, and I am forced to admit that there might be a little life in the old bag of fur. A look at the charts shows good gains in the spring grains, and the slowed wheat harvest is contributing to a bottom finally being found on the wheat charts.

Rain in the Plains has stopped the hard wheat harvest, and bought with it talk of declining test weight levels. This is particularly critical because elevators carried a lot of low TW wheat in from last year, looking to blend it out. The Chicago wheat has not been as volatile as the hard wheat markets, since harvest is still a couple of weeks away, even in this early year. Still, the July contract finally but in a bottom after a month of mostly lower prices. The low was on June 9^th, at 4.25-1/2. The bounce had us to 4.54-3/4 for a moment on Monday. (4.54—a nice point of reference for all you big-block Chevy fans, even if GM wants everyone to say "Chevrolet" now.)

The rains in the Midwest have stopped soybean planting, which is of some concern. The crop is at 91 percent planted, which is just above the normal 90. However, little progress is being made, and it is getting late.

The soybeans have worse problems than late planting. The outside markets we have been looking at are limiting exports. Again this week we failed to move offshore what we needed to meet the USDA calculations of demand. This time it was 7.4 million bushels instead of the 9.9 mb pace we need for the rest of the marketing year. The crush has also been disappointing.

Still, beans managed to jump 16 cents at one point Monday, and corn was up a nickel at one point. The what was up almost 11 cents. In this case the fundamentals did not overcome the easing of outside market issues. The dollar was down, crude was up, and the Dow traded both sides before going down 20 points.

For Monday, this overcame the fact that corn exports are also lagging. It also overcame the fact that the market anticipated improved crop conditions in the Monday afternoon report. The market was wrong, as USDA says the crop is not as good this week as last. That may come to play in the Tuesday market, although we were down fractionally in the overnight trading. The move up may have been a knee-jerk reaction to the official confirmation of the rumor of a sale to China last week. 120,000 metric tons is not a huge sale, but it is to China, where the rumor mill gets the most bang for its buck.

For the week, corn gained a 19-1/2-cent bounce off the low, July beans had a nearly 33-cent bounce to the Monday high, and wheat bounced nearly 30 cents to the Monday high. Let's see if we can keep the bounce going!

 

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Leaden market shows no bounce

Every so often in a really sick grain market we get a small bounce, and try to explain it. The common attempt is that it was a "dead cat bounce." The joke is supposed to be, if there is any humor in a dead cat, that even a dead cat can bounce a little.

The joke this week seems to be that we can't even come up with a dead cat to bounce. This market seems to be more like a fishing line sinker. It acts like a hunk of lead that just keeps finding another crack to roll into to get just a little lower and lodge there. The market tries to pull up the sinker, but it is snagged on a sunken log.

Grains on the Chicago Board of Trade are barely showing signs of life, as they move in small ranges on small trading at the bottom of long-term charts. Take July corn, where we were now as low as 3.35 on Monday night trading. That is barely above the 3.33-3/4 contract low and harvest low made clear back on September 6^th. Some of the first trading of the year had us almost to 4.43, a dollar and ten cents higher. Now we are back there to the low again.

If you are looking for any good in this market, it is that we at least have not broken the contract low. If we slide a little more, we will be hunting for support in new territory. Be warned that explorers end up in the cooking pots of the locals they are exploring. In other words, the market could have us for lunch. Not a pleasant thought, especially after what we have been through. Reminds me of the best line from one Indiana Jones movie. Turning down a particularly revolting food, the heroine says, "it's just that I had monkey brains for lunch!"

July soybean futures are almost as bad. There, we have had bounces in the last two weeks, but no real gains. The market goes up one day, opens at the high the second, and crashes again. July Chicago futures for soybeans had a 30-cent range Friday and Monday, and finished at the bottom of the range. Briefly Friday we saw 9.58-1/4, but traded 9.28-1/4 once Monday. We are overnight going into Tuesday at 9.35-3/4.

Compare those prices to 10.20 on April 26^th and 10.92 the first of December. The harvest low was 8.91. The good news is that we are not at the bottom, like in corn, just headed that way. The bad news is, there is plenty of room on the charts to go lower.

That cannot be said for wheat, where we are charting new territory every day. We make a new contract low every day we trade recently, and there is no stopping this until one day we look around and see the slide has stopped. With harvest getting close in the soft wheat states, it is hard to believe the slide stops now. Maybe we get a surprise at harvest? The surprise for the hard wheat farmers has been basis of 1.50 under. As bad as the Board is, the basis makes it worse.

We made the low ofr 4.31-1/4 Monday, nearly 86 cents off the May high at 5.17. The November high of 6.23-1/4 represents more than two dollars.

For the past several weeks we have been saying that markets were being pushed lower by outside markets. The Euro has made a four-year low against the dollar. This makes exports more expensive, and smaller. The Euro is in trouble because of economic and debt problems by member countries of the European Economic Community.

Interestingly, the chatter off the Board of Trade this week varied. On some days the comments were that we were trading grain fundamentals. On others, that we were trading the outsides. The scare there is that, even when we ignored Europe, we struggled to make gains.

The market currently believes we are making huge crops, and with widespread rain soaking us down, it is hard to argue with that.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Rain starts to make grain

I lay awake in the middle of the night for a long time listening to the rain. I am not sure why I do that. It should be a soothing sound to put me to sleep. Maybe I am listening for wind, with a vestigial memory of the night the elevator blew off the corn crib. Maybe I am remembering the storm that gave us seven inches in half an hour and cut Knapp Road in eleven places in the three miles between home and the farm.

Perhaps I am the victim of life in Ashtabula County, where the blessing of rain has often been overdone. Rain brings life and rain brings mudholes. Only those of us who eventually gave up and finally planted buckwheat the first week of July will understand that.

Monday and Monday night we had two inches of rain in most parts of the North Coast. Five miles of I-80 in Trumbull County had three inches while I was driving on it Monday night. At 20 miles an hour. With my flashers on. With Squeeze begging me to pull over. The rain most places was just what the grain doctor ordered, although I suspect there is still an occasional bean field here and there that is unplanted. Those who started planting very early finished up this week after a two-week break of wet weather . Those who said it was too early to plant in the middle of April were struggling to finish the last week of May.

For those of us who have converted to suburbanite living in the country, the rain meant the worst thatch of the decade was finally pushed into my lawn. I mow six acres, partly because it makes the house look like a country estate, and partly because I gave up a thousand acres and I haven't quite adjusted. The only reason I have a five-foot mower is because I haven't scraped up the money for a six-footer, and if I had the money I would build a pond instead.

The rain soaked in with no puddles and only some damage to the peonies from five minutes of hail. A walk with Jack the Wonder Westie and the Lumbering Lab early this morning revealed a beautiful day and the realization that I have never mowed my 100-meter rifle range and it is now waist high.

And, I am reminded that "rain makes grain." It is one of the strongest axioms of the grain trade, and it will hurt the chance of price recovery from the bearish market we are experiencing. Grain prices continue to decline on the Chicago Board of Trade. The corn and soybeans are now near the February lows, while the July wheat futures made a new contract low of 4.48-3/4 this morning on the overnight electronic trading.

The wheat low continues the down trend line which has a low at 4.83-3/4 in October, a low of 4.60-1/2 in early April, and the low this morning. Major news is needed to stop this train wreck, and what we have instead is perfect weather for wheat.

All grains are continuing to be hurt primarily by European economic and political news. This is an old story, but continues as the dominant one. This week focus was on another country, Spain this time, with critical debt issues pushing toward insolvency. The result was more erosion of the value of the Euro versus the US dollar. This is a mixed blessing that gives us cheaper fuel, but also cheaper grain. Crude was down $20 in the last week, but corn was down 28 cents in the last month. I don't want to see corn be the same price as gasoline, no matter how cheap that makes it to get to the grandkids.

July corn futures had a low of 3.51-1/2 the end of April, bounced in two weeks to 3.85, but hit 3.53 early Monday morning. July soybeans spent three months, in three stages gaining a dollar from 9.20 on February 4^th to 10.20 on April 26^th. This Monday morning they were back to 9.30-1/2 and still skidding.

Good crops at cheap prices are better than poor crops at good prices, so enjoy the rain. I am ambivalent about the dollar value. As a good American, I want it strong. As a retired farmer, I care more about good prices and profitable farmers feeding the world.

Oh, and don't call me after 2:15 this afternoon for awhile. The market will close, and I will be replacing the sleep stolen by the rain last night with a power nap in my chair. When the phone rings I snap my neck, and that gives me something else to complain about.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.

Market Monitor

By Marlin Clark

Tales from the tractor seat

Back in the dark ages, in the early 70's, the government in its wisdom decided to make Memorial Day come as a Monday, regardless of the calendar, in order to make a three-day weekend for the working class. The first year it came early, and we were still trying to plant on Friday as the holiday was starting.

I had made a 40-foot spray rig that mounted onto my 930 Case Comfort King. It had front and rear tanks, and the outer booms were removable so the same rig could be used for spraying while planting.

I finished spraying a field on U.S. Rt. 6 in Cherry Valley and parked the tractor at the driveway with the booms still out. We were moving to another farm ten miles away, and I was in a hurry. The plan was to get a ride back to the tractor with a neighbor who was helping me until his pager called him to his trucking job. Then, I forgot about it.

I remembered it at 4:30 the next morning when Dad called me. The neighbor across the road from where the tractor had been could hear it running in the field, in the dark. I threw on clothes, rushed to the farm, and saw what was left of it come to a stop against a power pole.

Sometime in the night a vandal shorted the hot battery lead to the solenoid wire and started it. He put it in fifth gear, which was over ten MPH with balloon tires, pulled the throttle down, and jumped off. The next hour or so, as near as we could reconstruct, must have been amazing.

There were two-foot deep ditches on both sides of the road. The telephone cable was on the south side, the power poles on the north. The tractor jumped the ditch into the neighbor's field and started making circles. The wheels jammed to the left, so each circle took it across both ditches to the north, then back across both ditches to the south. Each time it crossed a ditch it did a wheeley, hit the rear tank frame, and slammed back down.

On one pass it broke off a telephone pole. On a subsequent pass it snagged the phone cable on the boom and carried it back across the road. There it wrapped it around a power pole. Eventually there were50 wraps of cable around the pole, representing 25 trips with the cable. The wraps worked to the bottom, so eventually strain pulled the pole from the ground. It fell on the steering column. The hand throttle was bent past the detent that shut the fuel off, so the tractor stopped.

The tractor was a mess. At one point the radiator was holed, and the resultant overheating cracked head. Every piece of sheet metal was mashed. The steering column and seat were broken off. The spray boom was twisted. And, the tractor had kept running until the fuel was shut off. In the process, seven telephone poles were broken from the strain, and a quarter mile of power line was replaced.

There was good news and funny news, if you twisted your mouth just right. On a U.S. highway in the middle of the night, no one came along for all this time to run into the telephone cable. And, a half mile down the road, Terry Mills was awakened by a strange ringing of his phone. In the days when they were hard wired, his had been pulled off his table, up the wall, and was trying to leave the house through the wire hold in the wall near the ceiling!

I rebuilt the tractor over the next winter, and it went on to log over 8000 hours before I sold it. Memorial day is still on Monday, and I still remember, not the troops, but my tractor.

Oh yeah, for those of you who thought you would be reading about grain prices, I will tell you what I told a farmer this morning—I don't know what is going to happen to prices. Overnight we are down a nickel on corn and a dime or more on beans. The beans are now back to the February lows, after being nearly a buck higher. The corn had rallied, but is now in the middle of the recent range, at 3.65 July futures.

The outside markets continue to dominate, making actual grain news irrelevant. The Dow was down 126 yesterday, the European financial mess continues, and our resultant rising dollar is hurting soybean exports. We now question if we will make the USDA export projections for the year.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.