Free Commentary

While grain and soy markets closed higher yesterday, bulls did not have the hutzpah to hold the midday enthusiasm, but they have returned this morning to give it a go once again.  Yesterday, beans were leading the charge, but this morning, wheat has stepped to the front of the brigade and has pushed to the highest levels traded in over a month.  On the combination chart, we would point out that we have not quite reached into new highs for the overall advance but have again returned to the high-water mark.  While there is no “perfect” signal or chart pattern that always occurs when rallies are complete, I do have to say, one thing that we have seemed to lack at this juncture is the panic type blowoff.  There were hints of such action back in January but never any real confirmation.  As a whole, February has been somewhat directionless up until now, which in a bull market could qualify as the “February break,” or at least the February respite.  As we have noted previously, the market has a dual mandate right now, which is to ration demand and encourage production, and I would not be surprised to see the bulls try and complete that mission in March.

Many people take comfort in the routine, or at least with a known entity, and that appears to have been the case with the US Senate yesterday as Tom Vilsack was confirmed as the new (old) Secretary of Agriculture by a vote of 92 to 7. By any measure, that is a pretty substantial majority.

It has often been said that crime does not pay, and evidently, neither does price-fixing, at least when you get caught.  Yesterday, Pilgrim’s Pride pleaded guilty to such and has been ordered to pay a fine of $107.9 million.  While this may satisfy one of the federal charges, they along with Tyson, Perdue Farms, and Sanderson Farms still price-fixing face charges in Chicago that were brought by a number of groups including such names as Kroger, Walmart, Sysco Systems, and Chick-fil-A.

While there is no question that we have seen much more volatility in the grain/soy markets in the last six months than in almost the past six years, but to keep this all in perspective, here is an update for Bitcoin.  Since the Covid-19 panic selloff a year ago, this market has advanced from a low of just above $4,200 to a peak this week of nearly $58,000.  In fact, this week alone, we have seen a trading range of $12,890.  Now that, is what you call volatile, and certainly not for the faint of heart.