Mark's Market Talk
Aug 16, 2021
Last week the USDA released their August WADSE report. The average trade guess on the corn yield was about 2 bushels less than the July report. Once again the USDA surprised everybody and dropped their average yield estimate almost 5 bushels to 174.6. However they also adjusted their usage numbers to cover about half of the yield short fall. This took the carryout number down to 1.24 billion bushels. This is an almost In between number. It may not be tight enough force major price rationing, but if this number stands it may leave corn in the 5.25 to 5.50 cash range for fall. This would be prices farmers can certainly live with, and perhaps slow the inflation of crop inputs and land rent. For the week Dec corn was up 26 cents. The Pro Farmer crop tour will run this week and many traders are waiting for their boots on the ground reports to give them further information. In the past this tour has proven to give somewhat reliable results. It will be interesting to see how well it compares with all the crop variation we have this year. Yields 30 miles apart may be 50 or more bushels different. At any rate we are 30 days out on early yield results so the volatility may continue right into harvest. The USDA also lowered their bean yield estimate more than expected last week. They took July’s 50.8 number down to an even 50 bushels. However, they did just like the corn and adjusted the usage numbers which left the carryout number at 155 million bushels. On its own this number is tight but the world soybean stocks increased which may put a lid on our prices if we want to remain competitive in the world market. Beans closed report day about steady but were up strong Friday following more Chinese sales. For the week Nov beans were up 29 cents. The board has stayed in the 13 to 14.00 range for most of the summer. It too is waiting for numbers from the crop tour plus additional weather news as beans mature. Once the crop tour is wrapped up this week the trade will turn its attention to yield data and further export announcements. The Chinese bought beans almost every day last week, will this continue? There are also rumors they are looking at US corn since the second crop corn in South America is coming up short. We need further exports to keep this demand driven market moving. New crop prices remain profitable. If you have not made sales it may be time to start.