Mark's Market Talk

The USDA released their quarterly stocks report last Thursday and there was some pluses and minuses inside the report. They raised the estimated corn stocks at 1.24 billion bushels as of September 1. This was 85 million more than the trade expected, and by itself was neutral. However, the wheat stocks came in 72 million bushels less than the trade expected and that appeared to be a bullish number for the trade. Meanwhile the soybean stock number came in 82 million bushels higher than trade guesses at 256 million bushels and that was considered bearish as it takes a lot of pressure of the supply side. At the end of the week Dec corn was 15 cents higher as it followed the wheat market which was 31 cents higher. November beans slid the other way and closed the week 38 cents lower. The numbers released have an impact as they become the beginning inventory numbers for the coming market year. Bean harvest pressure is also playing a role here as we head into the heart of the harvest. From the comments I have read from across the corn belt I think if you survey 10 farmers on their bean yields 7 or 8 of them will say the yields are better than expected. I think this is true even in areas that we knew had problems. If that prompts the USDA to raise their yield estimate the 21/22 carryout creeps higher which will put a lid on prices. Then you look at the high cost of fertilizing corn for the coming year and wonder how many acres will switch to beans. Suddenly the bean market might look suspect. But we still have South American planting issues and Chinese demand to deal with, so there are no easy answers today when it comes to predicting where bean prices will go. On the corn side we still have good demand domestically, and a chance at some good export business. With oil trading higher it makes ethanol more attractive as a fuel stock. Higher wheat prices will slow down the feeding of wheat to livestock giving corn more demand. So today it might appear corn has a better chance of holding its value as we head into the second half of harvest. Locally corn yields are coming in above average. However, when you look at the Midwest reports, for every better-than-expected yield you have someone else who is disappointed. Reports like this does not lead to record yields.