Mark's Market Talk
Aug 02, 2021
We finished another month of wild markets last week. We continue to see more price movement some days than we used to see in an entire year. Computers have replaced the live outcry at the board of trade and computers do not let emotions affect their decisions. They do what the are programed to do. I think this is one reason we have more daily movement than we did in the past. If you are a hedger, fund buyer, speculator, or a producer you can enter an order almost 24 hours a day. It can be a day order or an order till filled basis and the computer will do what it is told. Traders can enter sell stops into the program that kick in when certain parameters are met and sometimes this is the small snowball that can become an avalanche that takes you along for a ride. This can happen going up and down. However, producers are normally caught on the way down as we allow emotions to enter into our decisions. We treat the crop as an object that we have raised from seed to harvest. The guy on the other side of the trade is treating his money as an investment and he sure does not want to tell his wife he lost it. This may not be the best price discovery method in the world, but so far we have not found a better way. In the meantime, we will need to manage our grain as an investment that needs to make a large enough return to not only take care the expense involved in raising it, It also needs to provide a living. December corn ended last week a penny higher. For the month of July corn was down 44 cents. Old crop basis remains strong as most of the remaining stocks are in tight hands. Processors are hoping for an early start to harvest, and it appears today they may get their wish on corn. November beans finished last week 4 cents lower, and they were 51 cents lower for the month. Half of the monthly loss came last Friday as traders liquidated some positions and took money home for the weekend. The forecast showed a chance of rain through the upper Midwest for the early part of the weekend. Rain chances past that diminish and the heat comes back in later this week so the bouncing ball may bounce again. Old crop basis has relaxed lately as the end users want us to think they have enough beans to last till harvest. This may be true but with the amount of fungicide that is going on harvest may be a week later than thought as healthy beans mature slower. There will be a lot of give and take in the weeks to come.