You’re probably hoping the crop markets are going to be more like Phio, and less like Ed. Well, you would be if you knew who Phio and Ed are, and why I just said that.
Phio is my 20-month-old daughter. I am Ed.
When I got up this morning, I felt rather weak and queasy. So I made coffee, ate some toast, lay on the couch, felt sorry for myself, then stumbled to the bathroom feeling sick. And I got sick. Yuck!
I then returned to the couch and felt sorry for myself, moping about for an hour before the rest of my family awoke. When Phio awoke, she looked none-too-well, cried briefly, turned her face away from me and launched the soy milk that she had recently consumed all over her bed and the floor.
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
Then she smiled and got off to a happy day of turkeying around the house, chucking toys around, and occasionally launching whatever soy milk, juice, water or chicken soup we tried to feed her. Nothing knocked her spirits for long. I, on the other hand, lay about morosely, feeling sorry for myself, and spending much time bewailing the fact that I felt ill.
This seems to be the state of the ag markets for the past week (I say, bending this personal point to a ridiculous degree) with the prices of all the biggies – wheat, corn, soybeans, canola – having been whalloped and ending up with their heads in the toilet.
They’re very sick.
Just look at Hard Red Spring Wheat futures on the Minneapolis Grain Exchange:
That’s a sick baby.
How about the overall commodities complex?
But let’s hope this is just a brief bout of tummy troubles, and nothing too serious. The last two weeks look bad, but as I lay on the couch, whining, I noticed that ag futures were up today. (As if to spite me?)
And when I dragged my whiny self downstairs to use my wife’s computer to look at some longer term charts, it looked to me like both ags and commodities in general had dropped back down to a medium-term trendline – and bounced up a bit. That’s good.
Let’s look:
Since July commodities have been bouncing off of that trend, never breaking far below it before recovering and continuing their climb. This recent little sickness in prices doesn’t break that trend – yet. Today’s action suggests that’s a line and a trend that wants to stick.
Ags by themselves look a little different. Take a look at the DBA, which is an ag ETF that combines soybean, corn, winter wheat and sugar futures.
This recent slump has taken ags further through the moving average trendlines I’m using, but last time it slumped through – at the end of September – it also bounced back sharply.
So is today the start of a short-term recovery and a return to a longer-term bull trend? Well, let’s hope this ag market is like a positive, optimistic and unflappable 20-month-0ld that gets sick and then gets back to gleeful playing, and not like a morose 44-year-old, who lies about on a couch, dragging-out a brief illness lower and longer than it needs to be.
Regardless, I’m sure we’ll all recover, whether we’re humans or crops. And with that note of optimism, I’ll return to my couch and my whining.
