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John_Walter
Advisor

A Feb price peak?

Just posted Roy Smith's new column (full story). Roy's look at longer-term trends today suggests that some seasonal patterns are going by the wayside.

 

He points out:  "While I never recommend making sales in February, if the price gets high enough to meet your cash flow requirements I would not discourage sales on rallies no matter what the calendar says. In 2011, for the first time in recent history, the yearly high in soybean prices was in February."

 

Thoughts on another February peak--like last year?

 

John

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7 Replies
sw363535
Honored Advisor

Re: A Feb price peak?

Very likely,  unless we stop relying on USDA for real data.

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IronBob
Contributor

Re: A Feb price peak?

(full story) doesn't link to anything. It sounds like it would be interesting.

Bob

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John_Walter
Advisor

Re: A Feb price peak?

Hi, IronBob: Thanks for catching that. I've added the link at the top post and here, too: Feb price peak for corn?

John

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gurly3801539
Advisor

Re: A Feb price peak?

Is it possible the seasonals are changing because our buying patterns and cash flow needs are changing?  We have to book and pay for our inputs much earlier now to get the best pricing.  Just a thought.

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Canuck_2
Senior Contributor

Re: A Feb price peak?

Could be gurly but is there another thing impacting it too.

That might be South America. As they produce a biger and bigger proportion of the world crop maybe that has changed the dynamics of the market.

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gurly3801539
Advisor

Re: A Feb price peak?

Canuck, my original thought was with SA crop just harvested that would magnify the low.  I guess it is possible that it could be a bounce like we get some times after our harvest.  I am not the best person to analise world markets.  My best marketing advise would be watch what I do and don't do it.Smiley Wink

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Jim Meade / Iowa City
Senior Advisor

Re: A Feb price peak?

I think Roy used to suggest there was a "John Deere" low in February because many farmers had a number of bills due and had to sell to pay them, depressing the market.   Maybe farmers don't have so much trouble meeting 1 March bills, maybe they are marketing differently, maybe the SA harvest is shifting, there could be a lot of reasons.  It would seem to me that historical price analysis seldom considers how the underlying facts change.  For example, you can go back in our lifetime and see the shift in increased production due to fertilziers, seeds and weed control.  We see industrial uses for grain much expanded.  Improved standards of living are increasing demand.  The dollar isn't at the same level it was once.  Ethanol is a big user.  With all these changes, we still seem to insist that looking back 20 or 30 years is valid.  I want to put my finger on the hands and my hand into the wounds.