Watch markets during holiday week
NORMAL – The shortened Thanksgiving holiday trading week coming up is a historic benchmark to watch for the markets.
It tends to be quiet heading into the week before activity starts to pick up.
“There are some tendencies to move up before Thanksgiving and down after,” Curt Kimmel with Bates Commodities told The Central Illinois Farm Network. “There could be some good opportunities arise.”
Many traders traditionally take the Friday after the holiday off when we are subject to back-and-forth price swings. Since the trade is now more computer-generated, it is not certain if this will take hold or not.
The markets have been holding together quite well with January soybeans approaching that magical $12 level. Now everyone is watching to see if we can achieve that price and stay above it.
“The soybean complex has been the positive feature with smaller inventories and the big demand base that the trade was not expecting came true,” added Kimmel.
Most of the beans we have here in the U.S. have been gobbled-up, according to Kimmel, and the world vegetable oil market has been strong. This has pulled up the soybean oil market in the U.S. We could even take a run to see beans in the teens for prices.
Looking back to 2010-2011, we had pre-fall lows and moved higher into January before the market cooled down.
“We still have a few days here before year-end and we get into January so the trade feels we could stay firm before we get a handle on the Southern Hemisphere where forecasts show showers possible.”
They will need timely rain events in that part of the world throughout December as crops get into the ground and growing.
Kimmel feels now is a good time to get started on some 2021 sales. The problem is making a cash sale out that far since the basis is wide. Growers should have some sort of a market strategy to protect the downside. That downside risk includes rain falling in South America or China cancelling bean purchases.
“When you have markets go straight up, often times they come straight back down so they are tricky and hard to play,” Kimmel explained.