Mark's Market Talk
Feb 22, 2021
Corn and beans both ended last week higher. March corn was 4 cents higher while Dec was 11 higher. March beans gained 6 cents while November beans advanced 24. As you can see new crop was the price leader in both crops. Some traders are thinking that the highs may have been set on old crop as the South American harvest is moving a little faster than it was. They will become the prime exporter of beans for sure, and Argentina will start to capture some corn sales as they are now priced below the US. The US sales for both crops are nearing the USDA estimates for this past crop year. Corn is at 89% while 98% of the expected bean sales have been made. We have 6 months left in the marketing year so you would think our goals will be easily met and exceeded. However, not all this grain has been shipped so cancellations could easily foul this picture up. The USDA may have had that in mind when they put their WASDE report out earlier this month as they did not raise the export numbers as much as the trade expected. This past week the annual Agricultural Outlook Forum was held. This event brings about 1600 people together each February to talk about the general condition of US Agriculture. The 2-day event had speakers ranging from USDA officials and economists to stake holders including producers and commercial grain and food processors. Each year they release a snapshot of the coming year’s expected acres and production. This year they predict US farmers will plant 92 million acres of corn, about 1. 2 million more than last year. They also expect 90 million acres of beans to be planted which would be an increase of 7 million over last year. They used trendline yields of 179.5 and 50.8. Like always they adjusted exports and domestic usage and came up with a corn carryout following the 2021 crop of 1.55 billion bushels while their bean carryout was 145 million bushels. The corn number would be considered as market neutral though poor weather somewhere during the season could have an impact. Meanwhile the bean carryout would be somewhat bullish as it would not take a lot of trouble to mess with our supplies. In late March, the USDA will put out their official planting intentions report. Between now and then they will be surveying producers, trying to get them to divulge what they expect to plant. They know some producers will jack with them and give them wild numbers. The USDA says they have a system to minimize the effect some of this would have on the final answer. Perhaps their system is not as good as they think since some years, we see a big difference when they start putting out actual numbers in June. The forum also put out their farmgate price estimate for the 2021 crop. Their corn price was 4.20 and their bean price was 11.25. Locally new crop prices are about a dime below that while new beans are about a dime or 15 cents above their estimates. We have not seen a lot of new crop pricing yet. Perhaps this report is telling us we should be doing some.