- DTN Headline News
Todd's Take
Tuesday, April 24, 2018 11:32AM CDT
By Todd Hultman
DTN Analyst

We are just past mid-April, and sensing the warmth of a new growing season across the Midwest, we have to say that row-crop prices have done fairly well, considering last fall's big harvests. Since the end of 2017, Dec corn is up 20 1/4 cents and Nov soybeans are up 52 1/2 cents.

The surprise of Argentina's drought in early 2018 shouldered most the blame for corn and soybeans' higher prices, but we also have to note that seasonal indices anticipate higher prices for both after early October, until early June for corn and until early July for soybeans. So far, row crops' higher prices have been right on their traditional schedule.

While the general trend of the seasonal influence is a helpful guide, the specifics of each year always have their own particular twists. As pointed out in last Tuesday's column, "High Time for Corn, HRW Wheat?" (https://www.dtnpf.com/…) spot corn prices have already reached last year's high and are now showing signs of losing upward momentum on weekly charts. After last week, the same could be said for Nov soybeans.

There is another factor at this time of year, which I described three years ago in a column titled, "Buckle Up." That particular piece was about how Nov soybeans show distinctly different price behavior in the first four months of the year from the following five months as crops get into the ups and downs of the growing season.

Not only do Nov soybean prices tend to show bigger moves from May through September, but prices also tend to take a different direction from their earlier start. Price direction differed between the two periods in nine of the past 15 years.

Looking at Dec corn prices, we see the same tendency at work as found with Nov soybeans. Over the past 18 years, Dec corn prices moved 76% farther on average in the five months after May as they did in the first four months of the year. Also, like soybeans, Dec corn prices from May through September went opposite to their earlier direction in 13 of the past 18 years.

Fundamentally, the research highlights an important feature to keep in mind for corn and soybean prices this time of year: No matter what prices do before May, it's a new ballgame after the growing season begins. If the past pattern holds up, both corn and soybean prices are about to get more volatile and will likely be lower at the end of September. For any producer thinking about buying a put option, market volatility tends to favor a time before May.

Of course, there is nothing about history that rules out the possibility of a surprise, so we will continue to monitor markets through the season with a keen eye on weather. Currently, row-crop conditions are off to a good start with temperatures warming and soil moisture generally favorable across the Midwest.

Todd Hultman can be reached at Todd.Hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

(CZ/BE)


blog iconDTN Blogs & Forums
DTN Market Matters Blog
Editorial Staff
Monday, April 23, 2018 11:53AM CDT
Friday, April 20, 2018 1:14PM CDT
Monday, April 16, 2018 11:03AM CDT
Technically Speaking
Darin Newsom
DTN Senior Analyst
Monday, April 23, 2018 6:55AM CDT
Sunday, April 22, 2018 11:59AM CDT
Sunday, April 22, 2018 11:57AM CDT
Fundamentally Speaking
Joel Karlin
DTN Contributing Analyst
Tuesday, April 24, 2018 10:37AM CDT
Friday, April 20, 2018 7:22AM CDT
Thursday, April 19, 2018 9:57AM CDT
DTN Ag Policy Blog
Chris Clayton
DTN Ag Policy Editor
Wednesday, April 25, 2018 8:31AM CDT
Tuesday, April 24, 2018 8:36PM CDT
Friday, April 20, 2018 2:00PM CDT
Minding Ag's Business
Editorial Staff
Tuesday, April 24, 2018 2:55PM CDT
Wednesday, March 21, 2018 4:18PM CDT
Wednesday, March 21, 2018 4:18PM CDT
DTN Ag Weather Forum
Bryce Anderson
DTN Ag Meteorologist and DTN Analyst
Tuesday, April 24, 2018 1:42PM CDT
Friday, April 20, 2018 2:42PM CDT
Tuesday, April 17, 2018 2:39PM CDT
Tuesday, April 17, 2018 1:17PM CDT
Thursday, April 12, 2018 11:17AM CDT
Wednesday, April 11, 2018 4:34PM CDT
DTN Production Blog
Pam Smith
Crops Technology Editor
Wednesday, April 25, 2018 7:54AM CDT
Friday, April 6, 2018 6:36PM CDT
Monday, March 12, 2018 2:32PM CDT
Harrington's Sort & Cull
John Harrington
DTN Livestock Analyst
Friday, April 20, 2018 12:26PM CDT
Friday, April 6, 2018 1:36PM CDT
Thursday, March 29, 2018 5:31PM CDT
South America Calling
Alastair Stewart
South America Correspondent
Wednesday, April 11, 2018 4:48PM CDT
Friday, April 6, 2018 2:21PM CDT
Thursday, March 29, 2018 11:12AM CDT
An Urban’s Rural View
Urban Lehner
Editor Emeritus
Monday, April 16, 2018 9:32AM CDT
Tuesday, April 3, 2018 5:03PM CDT
Monday, March 26, 2018 8:51AM CDT
Machinery Chatter
Jim Patrico
Progressive Farmer Senior Editor
Tuesday, April 17, 2018 3:01PM CDT
Wednesday, March 28, 2018 4:58PM CDT
Wednesday, March 21, 2018 10:08AM CDT
Canadian Markets
Cliff Jamieson
Canadian Grains Analyst
Tuesday, April 24, 2018 4:45PM CDT
Monday, April 23, 2018 5:45PM CDT
Friday, April 20, 2018 3:42PM CDT
Editor’s Notebook
Greg D. Horstmeier
DTN Editor-in-Chief
Thursday, March 29, 2018 4:58PM CDT
Friday, January 19, 2018 5:45PM CDT
Wednesday, January 3, 2018 11:53AM CDT
 
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN