Mark's Market Talk for May 19, 2025

Last week started with a friendly USDA report for both corn and beans, plus an announcement that the US and China was putting a hold on the proposed high tariffs for 6 months. Those 2 items should have set the course for a positive week. However, the old saying “don’t count your chickens before they hatch” comes into play here. Beans responded nicely to Monday’s report, but on Wednesday the sky fell as rumors out of Washington said the EPA was dropping the renewable fuels credit more than expected which sent bean oil down the limit and beans down the better part of 30 cents. At the end of the week there was still no official word on this. July beans ended the week down 2 cents, while November beans were up 5 cents. Monday’s report showed this fall’s carryout below 300 million bushels even with a record yield. The trade was long about 38,000 bean contracts in the middle of last week. This isn’t a large number as funds love to be long beans, but times are different and we can’t refer to anything being normal, On the corn side the reports continue that we are planting a lot of corn acres. The S&D report put the carryout below 2 billion bushels, which should be treated as positive since they used a trend line yield on 96 million acres. But the second crop corn in South America is doing well and they are priced under us for late summer delivery. At the end of the week corn was down about 6 cents on both old and new crop. The funds have been big sellers of corn contracts of late and are now short about 85,000 contracts after being long for several months. We need a weather market or some type of large incentive for biofuels to nudge these markets higher.