Commodity Markets interesting pattern given that U. S. export demand tends to all but disappear once the calendar page turns from February to March as Brazil becomes resupplied. This tells us domestic( U. S.) demand tries to pick up some of the slack during the spring.
It’ s a similar story for the National Corn Index with my seasonal studies show a strong rally from the last weekly close of September through the second weekly close of May( five-year index) or second weekly close of June( 10- year index). One of the key differences between corn and soybeans is the U. S. remains the key player in the former when it comes to production, usage and exports.( Again, though, this could change.) If we focus on the five-year pattern, we see the Index tends to gain 21 % during its seasonal move before abruptly falling off a cliff during the summer and fall quarters. During the spring— March through May— the index tends to add 12 % of its seasonal move. So far this marketing year, the index had gained 24 % from its low weekly close of $ 3.71 during the third week of September through the high weekly close of $ 4.64 the second week of February.
I could talk about any of the three National Wheat Indexes, but this time around I’ ll focus on soft red winter( SRW). During the course of wheat’ s marketing year that runs from June 1 through May 31( yes, including spring wheat, oddly enough), the SRW Index shows a seasonal uptrend from the last weekly close of August through the second weekly close of May( do you see the pattern throughout the grains sector, with high weekly closes around the second week of May?). The average gain is between 20 %( five-year index) and 13 %( 10-year index), with the SRW Index adding as much as 23 % from its late August price of $ 4.44 through its mid-February calculation of $ 5.46. If we just focus on the Q4, March through May, we see the index adds an average of as much as 7 %( 10-year) to 11 %( five-year).
While seasonal analysis doesn’ t tell us exactly how this quarter will play out, after all these are averages that act as guides rather than hard and fast rules, we do know Major League Baseball begins, confirming spring has arrived... and isn’ t that what’ s really important?
About the Author
Darin Newsom has been working with markets in general for nearly 40 years, dating back to Black Monday 1987. Over that time, he has worked in local grain elevators, first dumping trucks then as a merchandiser, before becoming a commodity broker and advisor. That eventually led him to DTN where he spent 15 years as the company’ s senior market analyst before going out on his own with Darin Newsom Analysis, Inc.
These days, he also has the title of Senior Analyst for Barchart. Along the way, he has developed his own way of analyzing markets in every sector, always proudly reminding people that he is not an economist.
March 2025 | www. FarmersHotLine. com | 31