Mark's Market Talk

Apr 24, 2023

Nothing good happened in the commodity markets last week so today’s comments will be short. July corn lost 21 cents while the December contract was down 12. July beans settled 18 cents lower for the week while the Nov contract was 16 cents lower. The May/July spreads in both crops continued to widen as nearby basis is strong. Processors of both commodities are pushing their plants to the limit, so they are telling us they want the bushels now, not later. Out in the country we don’t need the USDA to tell us the carryout numbers are shrinking; we can see it in the basis levels being paid to attract grain. It appears the basis levels will remain strong through most of the summer. Producers have been stubborn sellers as they don’t need a lot of money right now and are able to hold onto the old crop they still have. New crop sales have been very slow as we are looking at some big inverses in both crops. We are trading weather and the cold front last weekend probably supported the market a bit. Some areas saw heavy planting since the 10th of April and the weather was ideal for several days. Now after a short setback it looks like we will be back at the races this week. One big news story last was the 2 cargos of Brazilian beans headed to the US ports. This would total 2.9 million bushels and reading the news wire you would think this is something new. However, it isn’t uncommon for us to import 5 to 10 million bushels of beans every year. Most of these land at ports in the SE United States in areas that are not served as well by our transportation system. A fact I learned this week involves tax credits for soy oil products. A processor cannot claim these credits on foreign raised soybeans. Not sure how they track these bushels as I am sure the oil all looks the same in the end. The story of us importing these beans may cause more market disruption than the actual importation will. Domestic demand should support old crop prices as we move through the summer. New crop is a tougher call as the trade waits for the final planting numbers which is a ways away. As always, we need to watch for opportunities and know when to act on them. It all sounds so simple.