Mark's Market Talk

There were not many good signs in the commodity markets last week. The bullish WASDE corn report from the week prior was a distant memory last week as Dec corn closed down 36 cents. Meanwhile Nov beans ended the week 74 cents lower. The Pro Farmer tour gave its nightly wrap up each day, and it appeared the good areas were making up for the poor areas. They released their final numbers Friday afternoon, and they pegged the average corn yield at 177 and beans at 51.2. This compares to the USDA’s numbers of 174.6 and 50. They also added 900,000 acres of harvested corn which added more bushels to the total. So, who is right? The tour has earned some respect over the years as they go out and gather field data. They use the same formulas every year to give their reports some continuity. But the true question remains how accurate are they this year. In a normal year we have large areas of really good or really bad crops. And though you might say comparing Ohio and North Dakota this year would give you that. What is different this year is the variability from one side of a county to the other side. There are many places in this category where the corn yield might vary 50 bushels or more. Another question would be what effect the hot and dry weather the past 3 weeks has had. Even in our area where we had been blessed with decent rain most of the season the crops are now maturing too fast which normally means some yield loss. A major issue right now is nervous speculators. They are still long both crops, especially corn. Some of this money has been in place a long time and the fear of going upside down may encourage liquidation if we do not see more demand develop. So, the next 3 or 4 weeks leading up to the start of harvest may be very interesting.