Sun Belt farmers aren't the only ones who have been running into weather difficulties this spring. Roy Smith says it took him exactly a month to plant 500 acres of corn because of the rains that fell on his Nebraska farm.
Smith, a corn and soybean grower who farms near Plattsmouth in eastern Nebraska, speaks frequently on marketing from a producer perspective and writes the monthly Farmer to Farmer: $easonal $trategies Newsletter.
“We had a lot of rainy days but no really big rains,” he says. “Several times it was just enough to prevent field work for a couple of days; then we would get another one. I planted 80 percent of my soybean crop in six days last week. My fatigue from long days in the tractor is the reason this month's letter is shorter than usual.”
Over the years, Smith has contributed a number of new phrases to the marketing lexicon during presentations to American Soybean Association members and other groups.
He coined the phrases “John Deere low” to describe the market's dip in February when tractor payments come due, and “dead cat bounce” for the slight rise when farmers are preoccupied with harvest in the fall.
While it's not as catchy as those, he also uses the phrase ‘spring high” to refer to the time when the markets rally briefly to try to attract more acres to a particular crop.
The spring highs for corn and soybeans were later than usual this spring. The average date for soybeans is May 9, but this year's spring high occurred when November futures closed at $5.75 May 21. April 7 is the average date for corn, but this year's high came at $2.51 on May 15.
Those average dates came from long-term University of Nebraska studies of price trends that Smith encouraged and uses to help farmers improve the timing of their hedging strategies and sales.
The next marketing opportunity, he notes, will come from a weather rally — usually in mid-summer — when the market decides that heavy rains or drought will reduce the crop.
“With weather rallies in 22 of the last 24 years, the question is not if prices will rally but when,” he says. “Now is the time to make your plans. It is much easier to make good decisions before the weather gets hot and dry and prices get crazy. It is difficult to be in a selling mood when your growing crop appears to be in trouble.”
Smith says the timing depends more on market psychology than the weather. “When the market is depressed, it is slow to respond to fears of reduced production. Many times a problem will be developing but prices continue to go down. The market takes a ‘prove it’ attitude.
“With grains stocks already tight and the weak dollar, I get the feeling the rally will be sooner this year.”