Mark's Market Talk
Aug 29, 2022
The Pro Farmer tour wrapped up late last week and confirmed that the corn crop will be shorter than expected while the bean crop appeared to be a touch better. Their final number for corn was 168.1 bushels compared to the August USDA number of 175.4. They projected the average bean yield at 51.9 which was .2 bushel better than the USDA. The trade will have these numbers to trade until we see some actual harvest numbers next month. December corn ended last week 42 cents higher while November beans advanced 57 cents. It may be too early to say that corn can get back to 7.00. US corn is not the cheapest in the world and the current sales numbers have shown this, we are not selling corn at this time. Domestic use remains good as livestock numbers are strong and high crude prices keep ethanol demand positive. However, high fuel prices and continuing inflation is slowing gas demand and once the summer travel season is over, we may see reduced demand for ethanol. An interesting comment from the tour concerned the irrigated corn in Nebraska. The participant said from the road it looked like the normal 230 plus corn, but when they got into the fields, they found yields closer to 180. They felt the extreme heat had hurt the crop worse than expected. It appears we may find the same thing in our area. Modern hybrids can handle a fair amount of dry weather, but when you throw in the heat we had this season we may find the crop stress hurt more than we thought. The tour’s bean number will be debated all week. The bears will point to the 51.9 and say we will have plenty of production. Their other point will be the expected record planting that will start this fall in South America. Meanwhile the bulls will point out that US beans are the cheapest in the world and sales should continue to be good. Crush margins are still record high which is pushing domestic demand. At the end of the day, we will continue to see high volatility as we enter the harvest season. Wild weekly swings have become common, and the object of the game is to sell on the upper swing.