I remember in 1959 listening to a hit song by Dinah Washington titled, “What A Difference A Day Made.” It was written in 1934 and has been recorded by many other singers.
Not surprisingly, it is a love song about that wonderful feeling that arrives with a new romance when stormy skies clear and rain turns to sun.
That song title popped into my head after the recent USDA report of last week that had numbers that were lower than the market was anticipating, setting off fireworks in the grain markets worthy of the Fourth of July.
I have written several times of being an indifferent sports fan, but in spite of my indifference, sports offers some very good analogies.
For example, every game has an offense and a defense depending on who is in control of the ball.
Before the recent USDA report, I was playing a defensive game in my grain marketing. The market had fallen from its highs and was headed downward.
Marketing analysts were saying, “Any rally is a time to make sales.”
The slightest upward movement in the grain market was a time to grab it before the market resumed its downward movement. Supplies were plentiful and the big crop in the field was getting bigger day by day.
Another song comes to mind. Remember Chubby Checker singing in the Limbo song, “How low can you go?”
It appeared in the months to come, we were going to find out just that.
But the USDA numbers showed supplies were not as large as the grain market expected them to be plus there seemed a healthy demand for those supplies.
We were already in the beginning of a weather market due to heavy rain in Missouri, Indiana and Ohio, and rain was delaying the wheat harvest in Oklahoma, Kansas and Nebraska.
I figured, “Let’s get this nuisance government report out of the way and get back to trading the weather.”
The numbers came out and we were off to the races. I no longer was playing a defensive game in the grain market. I was now on offense, trying not to sell too soon.
Two days later, I was listening to a grain market analyst on the radio describing what has happened to the markets, grain and livestock, since the USDA report numbers were released, catching everyone by surprise.
He put the big shift in market psychology in terms of what happens when the GPS in your car discovers you are not taking the route it has picked for you.
He said the market is “recalculating.”
That was so insightful, I was wishing I had thought of that.
Prior to the report, I had sold about half of my new crop soybeans, to be delivered straight from the field to the local elevator, for an average of $9 a bushel. Those were looking like good sales until the report was released.
Now my average of $9 a bushel new crop bean sales, instead of looking like a maximum, may turn out to be a minimum.
We sold corn the day after the report for delivery next April for $4.18 a bushel and I thought $4 corn sales were a thing of the past.
But this market move is no different than any other market move. There was a mixture of good news and bad news.
It all depends on whether you are buying or selling.
Rye is a Farm News staff writer and farmer from Hanlontown. Reach him by e-mail at firstname.lastname@example.org.
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