Mark's Market Talk

We are at the time of year the markets normally trade steady to higher as harvest is done and the grain doors are shut. We had been trading that way until last week when the wheels got loose on the grain markets. Thursday morning the EPA announced their intended biofuel mandates, and it was far less than the trade had expected, especially for soy oil. The board almost immediately went down 40 cents on the Jan bean contract, and it stayed there. Up until then we had seen some decent advances earlier in the week on beans as the planting progress in Argentina is way behind normal. Friday brought a little relief, and we recaptured 9 cents. On the week Jan beans were 2 cents higher. While beans caught the most attention last week, corn continued to slide lower most of the week. In fact, March corn was 25 cents lower, and we closed below 6.50 on the board Friday for the first time in a long time. You can read 5 people’s comments and get 5 different stories of why corn  headed south. The most common reason is the slow export market. However, this didn’t just happen as the export pace has been terrible for some time. Russia and Ukraine may be exporting more grain than they are letting on. They are selling at a far lower price than we are and it’s easy to make a sale if you are 50 cents cheaper. China appears to be sitting on the sidelines waiting for cheaper South American corn if the weather allows them to produce a large crop. We had trade agreements in place that were working, but now no one is stepping up to enforce them. If you follow the Washington news you may know that we have been without our top 2 agricultural trade negotiators since the change in administration almost 2 years ago. No wonder our export pace is poor. This coming week will be very important to us as we see if the down spiral in corn will continue, or do we bounce. End users are stepping up their purchases as basis levels continue to be very strong for both corn and beans. The question now is when will the farmers start selling again. We should see an uptick in sales around the first of the year as producers finish their 2023 crop input buying. After that it is anyone’s guess where we head.