Mark's Market Talk

Aug 15, 2022

Last Friday the USDA released their August S&D report and as usual there was a surprise or 2 inside. Corn numbers came close to matching what the trade expected as they lowered the national yield 1.6 bushels, the trade was looking at 1.1 bushel less, so this was bullish. They also reduced the corn acres by 100,000 due to the resurvey of the northern plains. At the end of the day Dec corn was 14.5 cents higher. The bigger surprise was on the bean side where they raised the expected yield .4 bushel while the trade was thinking .6 bushel less. They did reduce the planted acres 300,000 so that offset some the additional yield. After trading lower following the report, November beans finished 6 cents higher last Friday. When the dust settled new crop corn carryout was reduced 82 million bushels while the new crop bean carryout increased 15 million bushels. These are not huge numbers, but with tighter stocks comes more volatility. For the week December corn was 32 cents higher and November beans were 45 cents higher. When most of us look out our backdoors we think the numbers are way too optimistic as we need rain thru most of our trade area. The corn potential peaked out weeks ago. There will still be some respectable yields in our area, but we have lost the top and if we don’t see some rain within the next week, we will continue to lose corn yield. Most of the beans in the area still have a shot at good yields but it is going to take some decent rain right away. The 6 to 10 has a couple chances of rain and it is also cooler which will help. That’s our backyard. What about the rest of the Corn belt? From what I read the is a lot of variability. Some areas are like us and dry. There were reports Friday that corn choppers were running in western Iowa. Chopping corn on August 12th tells you the crop is poor, and they are trying to salvage what they can.  However, there are areas like northeast Iowa that could not look better, and you hear that from other places across the country. For those who have not sold any new crop it may be time to take a  look at pricing some. We are approaching 6.00 corn and 14.00 beans. With all the yield uncertainty it might be wise to lock at least a small portion of your harvest in. There are so many factors that influence the price of grain anymore. Most of them are out of our hands so it would be best to be prepared to pounce on some good rallies.