Mark's Market Talk for August 19, 2024

The markets continued their price decline last week as Sept corn closed down 6 cents and Dec was down 3. Beans had a rougher week as the November contract lost 45 cents for the week. The August supply and demand report was released last Monday and as expected it had a couple of surprises. They did lower the harvested corn acres by 600,000 but raised the average yield to 183 bushels which was a bushel more than earlier reports. The net of this lowered carryout about 14 million bushels which is not much of a change. On the bean side they left the acres alone but raised the expected yield 1.2 bushels to 53.2 which added 125 million bushels to the carryout raising it to 560 million bushels which is a very negative number. We now have an uphill battle on bean prices heading into harvest. Late last week we saw the terminals lower their basis levels as they prepare for the influx of new beans in a few short weeks. Corn basis levels backed off a bit also as the annual August bin cleaning has kicked in and there appears to be more on farm stocks than normal. Farmers have very limited new crop bushels priced heading into harvest. Probably the only glimmer of hope right now would be the annual Pro Farmer crop tour that runs this week. Their chosen locations will either confirm the USDA yield numbers, or if they get into some fields that struggled this spring, they may come up short to the expected yield number. Traders put a lot of stock in this tour and the results they put out. It may be the last possible market mover ahead of harvest. The funds continue to be short the markets to the tune of 250,000 corn contracts and 175,000 bean contracts. At some point they will have to even these out and the question remains, will they do this before we hit total bottom? Or will they continue to defend their position through harvest?