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Mark's Market Talk

July 13, 2020

Last week the trade was waiting for Friday’s S & D report to find further direction for the market. We had seen some weather premium added in earlier in the week but forecasters were disagreeing by Friday morning as it appeared there was a 50/50 chance of widespread rain in the near future. The funds were still very short the corn market while they had started to build a long position in beans. The report was very neutral for corn and only slightly bearish to beans and post report both were down a couple of cents primarily due to the weather forecast. Then right before 11:30 central time President Trump tweeted that a phase 2 agreement with China was no longer a priority as he felt they had been untruthful in their reporting of the Covid 19 outbreak and couldn’t be trusted to carry out an agreement. Corn and beans immediately dove down double digits ruining a decent Friday market day. Earlier Friday it was announced the Chinese had made their second largest corn purchase ever from the US and the talk was more purchases were coming. I’m sure the President had reason to tweet what he did, but it couldn’t have come at a worse time for farmers. Pricing opportunities have been very scarce. We were just starting to see farmer selling take off after the surprise acreage report from 2 weeks earlier. A small amount of weather premium had been added in and thou the prices were not really profitable they were better than we had seen in a while. The weather the next 10 days will have a huge effect on the corn market. If we do stay hot and dry in the areas already suffering, we could see a run up in prices. However, if it turns cooler and wetter throughout the Midwest we could struggle price wise. Beans will ride the corn train for now as they are made in August and early September, not July. After the dust settled Friday September corn was down 7 cents for the week while December was down 9. Beans faired a little better as August closed down 4 cents while November was down 7. To say Friday’s news was detrimental is an understatement. President Trump has had broad farmer support so it’s puzzling that he would pull the rug out from under them with comments like he made Friday. He may have been right in saying the Chinese can’t be trusted, but the fallout from how he said it will have a long tail.   
Posted: 7/13/2020 1:19:17 PM by Rob Matherly | with 0 comments

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