Mark's Market Talk
Apr 25, 2022
Here we are at the last week of April and the planters are sitting in the shed waiting for favorable planting conditions. The next 2 weeks will be pivotable for the corn market. We have a cool/wet pattern in the mid and east corn belt that has not allowed corn planting to start. The west stays dry and cold, so they are not doing much either. The markets are already on the high side with all the world issues we are dealing with. If we are sitting here 2 weeks from now with most of the seed corn still in the bag it could get interesting real fast. However, the trade knows we can plant a crop super-fast when we are given the opportunity. This will probably temper things in the near term. Supply chain issues are still a problem in some areas, but the delayed season is allowing some companies to catch up. Rail shipments have become a real problem not only for getting fertilizer into the mid-west, but also for moving grain out to end users. Deregulation has been good for many industries, but rail service in Iowa has suffered as consolidation has slowed the traffic in many areas. You can compare the railroad structure today to the big 4 packers we now have. As they have gotten bigger many customers have seen slower and less reliable service. The government has the authority to step in and order the railroads to prioritize their shipments which would push food and fuel up the ladder. This process has been discussed and hopefully the railroads will step it up without intervention. One of their biggest problems is the same one many companies are battling, finding willing workers. We are not only seeing problems moving grain to the end users, ethanol and soy plants are having trouble getting their finished product moved out. We all need to support a massive improvement of our infrastructure in this country so we can keep the advantages that make the US the world’s most reliable supplier. Last week we saw mixed closes in the grain market. July corn was a nickel higher while we lost 10 cents in the Dec contract. July beans were 23 higher and November advanced 3 cents. We would have ended a lot better if we had just stopped trading about 9 Friday morning. Corn and beans were both higher coming off the morning export sales report. China bought 53 million bushels of corn while Mexico bought 11 million corn and 5.3 million beans. Then the bears took over and by the time the board closed everything was lower with beans down 26 to 32 while corn was 6 to 14 lower. Uncertainty about this week’s weather was a big reason for this. Some traders were hesitant to go home for the weekend hanging on the long side. It will lead to an interesting Monday market. Last week there was a picture on the internet of a Ukrainian farmer wearing a bullet proof vest and a helmet while he was planting his crop. Our weather and inflation issues are nothing compared to what those farmers and citizens are dealing with.