Mark's Market Talk

Apr 18, 2022

We saw another week of up trending grain markets last week which was a 4-day trade due to Good Friday. July corn closed 23 cents higher while the Dec was 19 higher. July beans ended the week 3 cents higher while the Nov advanced 6 cents. Corn followed wheat higher as the Chicago wheat was up 46 cents for the week. The ethanol business was good as processors are making money on every bushel they buy. The President’s announcement allowing summer sales of E15 was positive the corn market. China bought 40 some million bushels of corn earlier in the week and it is rumored they may make 2 more similar buys. The trade is already looking toward the May WADSE report with a curious eye on the carryout which many think will be reduced further. The US weather will start coming into play starting this week if we don’t see corn planters moving. We are not late by any means but with lower corn acres predicted any planting glitch will rally the corn market more. The bean market was fairly quiet last week. Beans bottomed out on April 1st following the acreage report on the 31st. If you fast forward to last Thursday, you see that both old and new beans have rallied over a dollar in a 2-week time frame. That is wild considering the report estimates we will plant a record 91 million acres of beans. If you compare new crop corn to beans the current ratio is below 2.1. The time-honored ratio of 2.5 which has been used for years gives corn the advantage for any number below that. 2.1 should push people to plant corn, however the high cost of inputs has messed with this ratio a bit. It does not appear we will see many acres switched to corn with anhydrous over 1500.00. The new renewable diesel of the future will grow the soy demand going forward as it becomes the new ethanol for the bean market. These plants will start coming online in a couple of years and will push the bean market higher yet. Lots of things going on in agriculture. Years ago, a nickel move in a week on the corn market was a move. Now that can happen in a few minutes, and we see 50 cent or dollar moves on the week. We have to love what we do to keep doing it.