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Mark's Market Talk

July 20, 2020

We started last week on a lower note as corn and beans had follow through weakness from the nosedive that occurred the previous Friday. Since then the markets have stabilized as corn finished the week down 4 cents while August beans closed 11 higher and Nov was 5 higher. The phase 2 comments from a week ago seem to be forgotten and we are back in a weather market with support from export demand. Corn traders are still short the market, but they have covered about 2/3rds of their shorts. This has helped hold the market in place as the forecast changes daily. We are looking at some very hot weather in the corn belt, but there are decent rain chances missed in there. Those that do get the rain will survive quite nicely while the areas that are already suffering could begin to see irreversible damage. Local new crop corn bids are having a hard time getting much above 3.00. With production costs being higher than that it becomes hard to get exited about making sales. Then you hear some traders talking the board may trade down to 2.80 at harvest and you start to question yourself. Right now, it appears we may need to lower our price expectations on corn and hope we can raise enough bushels to dollar out. Beans have a different setup working as export demand has returned to the US. Our prices are very competitive worldwide and we are seeing sales almost daily with the Chinese leading the charge. They have a lot of people to feed and with their hog industry coming back online they need lots of beanmeal. Couple that with a shrinking carryout in worldwide oil seeds and perhaps we might see beans try to get back to 9.00 local. I do not think you want to hold out for that number, and we should start making sales in the 8.50 range and hope every sale is better.  Every year has its challenges either in the production of the crop or the marketing of the crop. To date many in our area have met the production challenge, though mother nature can still take it away. All of us will have to meet the marketing challenge head on. That might mean selling the old crop sooner than later to make room for what appears to be a big crop. Then if prices do take off you sell new crop bushels and try to get ahead of the curve. Be safe.
 
Posted: 7/20/2020 4:28:28 PM by Rob Matherly | with 0 comments


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