Mark's Market Talk
Aug 14, 2023
The USDA released their August supply and demand report last Friday. It was a slightly bullish report for both corn and beans as the carryout for both crops came in a little lower than expected. By the close of trade Friday corn was down 9 while beans were down 11. For the week December corn was 10 cents lower and November beans were 25 cents lower. This report leads you to believe the USDA started with the bottom number and worked their way up to their yield projection. Current weather forecasts still look to be mostly favorable for the next two weeks with chances for more rain which will surely help the bean crop. Reading reports from Illinois show their crop prospects have improved a lot in the past month as many of the dry areas have received some rain and the crop has responded. It appears the doom and gloom reports we saw from this area earlier this summer were premature. The hybrids we use today are far superior to anything we planted 20 to 30 years ago. The weather has been far from perfect in many areas and yet it looks like most will harvest a respectful yield. So, what do we do now. Most have very little or no new crop corn sales. The past couple of years showed us waiting to price was the thing to do. Now we find ourselves in a tough spot as prices are well below breakeven. Chart watchers were saying if December corn stays at 5.00 or better things will improve. Friday, we closed at 4.87 and now they are saying we might be on the way to 4.50. Should this happen, we will be competitively priced in the world, which should improve our exports. The funds are short the corn market and need a reason to get long. Increased sales would be the fastest avenue to make them want to go long. The bean numbers show a tighter situation and a hiccup in the expected yield can make a quick difference. A good frost scare in early September might propel us higher faster than anything else. Otherwise, it will take increased demand to help us recover price wise headed into harvest.