Mark's Market Talk

Dec 12, 2022

At first glance last week’s USDA report was a nonevent as they lowered corn exports 75 million and left the bean numbers the same as last month. At the end of the day corn was a little stronger while beans were a little weaker. However, when you dig a little deeper into the numbers you find some interesting things on the world numbers. Worldwide corn production was lowered with most of it coming from the reduced production in the Ukraine. This is important as Ukraine is one of the largest exporters of corn even though they are not among the largest corn producers. That may help our exports as Brazil runs out of their first crop corn in a couple of months and then we become the largest source of exportable corn in the world. The recent rally in beans has been led by the meal market which is being driven by the reduced crop in Argentina. As a country they want to do the bean processing and export meal and oil. Right now, they are short beans to process which is giving us opportunities to sell our meal to the world. The domestic crush is still highly profitable, so bean plants in the United States are running full speed. At the same time, it seems the bin doors were closed at harvest and most producers are holding sales until next year which is forcing plants to narrow their basis for nearby beans. This past week January beans were 45 cents higher which took us back to our pre harvest highs. Meanwhile corn had a quiet week and lost 2 cents. Support has been holding on the March corn contract, but we are having trouble finding a spark to propel us higher. That may come this spring if the drought continues to linger in a large part of the country. Hopefully it comes sooner from an increase in exports. New crop corn prices are not very attractive when you look at the high cost of inputs. Sub 5.50 corn does not pay for a lot of 1400.00 anhydrous. New crop beans are trading in the 13.25 range which may look better right now. Most people in our area seem to be planning for their normal rotation at this point. With the December crop report out of the way the trade will turn its attention back to the war in the Ukraine and the weather in South America. The Argentina crops have been hurt, some of them greatly, but the Brazilian crop shows great potential at this time and could offset any loss incurred by their neighbors. We know all too well that the world events have a huge effect on our markets. This will probably never change.