Mark's Market Talk

Feb 01, 2021

What a difference a week makes. On Friday January 22 it appeared the grain markets had hit a brick wall and we entered this past week not knowing for sure what we would see happen. Well China is what happened. They bought 230 million bushels of corn from the US last week. This had been rumored and expected to happen and we finally saw actual purchases. The question now is are they done? Most traders think not as China’s domestic supply of corn is critically low and they are ramping up their hog production. The story about a new Swine Fever outbreak turned into a manageable deal, so it has not dampened things since. This past week March corn was 47 cents higher, so we got the 31 we lost the week before plus some more. However, December corn was only up 14 cents and that shows the current rally is all about export sales of old crop corn. There is not a lot of interest in new crop from an export side as the world is waiting for supplies to show up elsewhere. Normally the next supply comes out of South America and their second crop corn. Ever since they planted their beans down south, we have heard how dry they were and close to a reduced crop. Now that harvest time has started so has the rain and it is causing bean harvest delays. That in turn is holding up the corn planters waiting to plant their second crop corn. If the rain persists it will help the US in a couple of ways. China has a lot of Brazilian beans bought but if they cannot harvest them, China may look at the US to supply their immediate needs. Good for our bean market. Late corn planting may push the pollination into the hot dry season which could impact their corn yields. Good for our corn market. Many things are in play here and are having an influence on world supplies and prices. By the way, March beans gained back 58 cents last week of the 1.07 we lost the week before. And like corn the new crop bids are lagging as locally the October bean bids are still under 11.00. Every year we wonder when the high in the market will come and this year is no different. So far, the bold ones that still own old crop appear to be the winners, but like we saw on the 22nd it can go away in a hurry. Rallies are meant to be fed. Normally waiting for the high means you end up selling on the way down and sometimes it takes a couple of dollars of loss to make you realize you missed the boat. I guess on the bean side you could loss 2.00 and still be 2.00 ahead of the harvest price. I’m not sure if that makes you a winner or loser.