During the last two weeks of holiday trade for the agricultural markets there have been occasions of some wide swings due to the light trading volume and the volatility that can bring. Friday, a full day of trade, represents one more day to watch out for erratic markets, according to Mike Silver at Kokomo Grain.
“We are subject to a selloff at any time, obviously, and we know that there are extraneous factors that come into this market at any time. An example is the decline of the Russian ruble and the effect that that had on not only the financial markets, but it spilled over to the grain markets. And it’s still having some effect on the wheat market. In thinly traded holiday markets we can be volatile either way, so be prepared, and with the New Year there will be bushels that want to move to town, so we want to be cautious of those basis levels because they could start to fade into the New Year.”
Silver says if you don’t have someone helping you market your grain, the New Year might be the right time to get help.
“Find a trusted advisor that you can bounce ideas off of. Look at some alternative strategies. There still is carry in this market and as I remind folks all the time the way to earn carry in the market, you have to make a sale. You have to drive a stake in the ground, but with the carry in the board and with basis opportunities for later spring and early summer delivery, there are opportunities, and I encourage people to take advantage of those.”
Silver is senior grain merchandiser at Kokomo Grain and a HAT market analyst.