Make a sale to be thankful for

November 21, 2024 | Kriss Nelson

Is there any chance of a Thanksgiving market rally we can all be grateful for?

“I refer to this as a key change trend week,” says Al Kluis, managing director of Kluis Commodity Advisors. “One reason I like to sell during the week of Thanksgiving is that it often corresponds with a market high, as has been the case in 2022 and 2023. It’s not consistently high, but I’d estimate it’s high over 60% of the time.”

Markets have seen some progress since hitting their low point this summer.

Soybeans hit a low near $9.40 in August and now, March soybeans are trading near 60 cents from that bottom at $10.20.

“We had extreme lows in August, and prices have significantly improved since late October,” he says. “If you have soybeans in commercial storage and need to cover operating notes, it’s critical to stop accruing interest and storage costs. Making these sales decisions often need to be made by late November.”

The same situation applies to corn. In August, corn futures were at $3.60; currently, March corn futures are at $4.40, which is 80 cents off the bottom of the market.

“Although the current prices are still disappointing compared to one or two years ago, this is now the new reality and a price you should take advantage of, especially if you have grain in commercial storage. It’s important to stop the meter from running,” says Kluis.

Look for opportunities to put extra cash in your stocking

If you live near a corn ethanol plant or a soybean crush plant, farmers might find attractive cash bids during the holidays. 

Even on Christmas day, these plants are still processing,” he says. “If you are flexible and have the manpower, and if road conditions permit, some farmers move grain—not necessarily on Christmas Day, but during the week between Christmas and New Year’s. These plants need the product and often provide a premium for delivery.”

Looking ahead 

In the next few months, Kluis is watching how South American weather could influence the markets.

“Currently, weather conditions for farmers in South America have been good, with only a few problematic areas,” he says. “Trade and USDA numbers suggest that this year’s crop will be larger than last year’s, which will start hitting the market by late February to early March. We need to take advantage of this rally by selling before the South American harvest rather than after.”

Kluis emphasizes the importance of avoiding grain sales in the last week of February.

“That time stuck out in 2024 as a major low,” he says. “Those who waited to make land, rent or equipment payments in late February or early March and waited until the last minute to make that sale ended up making a terrible one. You have to think ahead. I am not recommending selling 100% of your crop. But I want you to ensure you have enough sold that you do not have to sell grain in late February. It’s essential for farmers to stay disciplined and make sales during market rallies.”

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