Mark's Market Talk

Aug 08, 2022

The roller coaster ride continues in the commodity markets. We saw a big up day last week, but most days things were lower. At the end of the week December corn was down 10 cents, but we did close above 6.00 at 6.10. Meanwhile November beans took a 60-cent hit and most of that occurred when the plane landed in Taiwan which is discussed later. Oil futures closed the week below 90.00 for the first time since the war began in Ukraine which is good when you fill your car with gas, but bad for the ethanol market. Congresswomen Pelosi’s trip to Taiwan has upset the Chinese Government and many fear they will pull back on the purchases of American goods. Late Friday they did announce they were severing ties with the US on some environmental agreements and will only buy goods when the price and need dictates it. I think it can be argued that for the past year or so that is the only time they have bought from the US. They were ignoring their trading commitments prior to this trip, and now they seem ready to go back to the old one-way trading system that only benefits them. That will put fear in traders as the Chinese exports are very important to the US and we need them to grow, not disappear. This tug of war will continue, and it appears we have lost the slight edge we may have had when they signed the phase one agreement. This will play out for some time. Weather is still a huge market factor. This crop needs moisture in a lot of the growing area and the time is getting critical. It has been a tale of the haves and the have nots when it comes to recent rain. Some areas within our trade area have gone 5 weeks without a decent rain, and it shows. There have also been places in other states that have had monsoon rains and that hasn’t done any good either. The forecast for the rest of August is still hot and dry. Let’s hope we see some rain. The August supply and demand report will be released this Friday. Private yield estimates have started showing up and most are lowering the corn yield a bushel and the bean yield half a bushel. They will also revise the planted acre report using the resurvey numbers from the Dakotas and Minnesota. There is little doubt that this report will move the market. It will give us something to talk about next week.