Mark's Market Talk

Another week and another USDA grain report. However last week’s stocks report was fairly neutral and did not provide the fireworks that the planting intentions report did the week prior. The government lowered the corn ending carryout down to 1.352 billion which was close to the average trade estimate. We saw May corn jump up almost 20 cents last Thursday as the funds added 35,000 corn contracts to put them record long around 469,000. It appears a lot of traders did not want to miss the game if Friday’s report was big time bullish. Since it was not May corn closed a couple lower on Friday but finished the week 16 cents higher as Dec corn was 12 higher for the week. The corn market has some pluses and minuses facing it between now and harvest. The carryout is shrinking but as the price of corn increases feed wheat looks more attractive to feeders. Last weeks report did not lower the South American corn production even though they have had a fair amount of hot and dry weather. If it fails to rain in these areas, we may see more interest in our new crop corn on the world market. Local new crop corn went over 4.50 this week giving farmers some profitable opportunities. Most years we have 3 or less opportune times to price new crop and we may be in one of those periods right now. Nothing wrong if 4.50 is the cheapest corn you sell this fall. Back to last weeks report, they left the bean carryout number at 120 million which matched up close to the average guess. Once that information was released beans headed south and the front 5 contracts closed 10 to 12 cents lower on Friday. May beans were only a penny higher for the week while Nov beans were steady. The USDA jockeyed a lot of numbers in the bean stocks report to keep the carryout at 120 million bushels. This is the number where the pipeline starts to suck air late in the summer ahead of new crop supplies. The report is telling us there should be enough beans to get us to harvest. However, if you take the number of bean acres in the recent planting report times trendline yields and plug in the current demand, we will be short beans a year from now. Many producers missed the rally on their 2020 crop. Right now, it appears we will have some chances to make that up on the 2021 crop. Weather, not only in the United States but worldwide will have a huge impact on how the coming year shapes up. World grain stocks are lower than normal and with a growing population food security will be on everyone’s thoughts.