Mark's Market Talk

Last week we saw a continuation of higher weekly closes in the grain markets. March and December corn both finished the week 3 cents higher. The standoff at the Russia/Ukraine border has been supportive for US corn as an invasion will slow or stop corn exports out of the Ukraine. However, the long-term results if Russia does invade will not be market friendly worldwide. For the most part Ukraine has been a respected competitor of the US, Russia has been far less respected. Let’s hope this situation can be settled. Meanwhile soybeans continued their march higher as old and new contracts closed 18 to 20 cents higher. The South American crop is still at the forefront of news as yield projections keep coming out lower. At some point the focus will shift to other factors such as our own weather, planting intentions, and inflation talk. Oil closed off its highs last week, but that does not mean the threat of inflation, or higher energy costs is over. President Biden has stated he will do something to control the price of oil in this country. Most of us have that answer, he needs to allow the US companies to go after our own oil like we were before we changed administrations. Somehow, we went from being oil independent and exporting oil, to being dependent on foreign oil again. Sometimes it is hard to understand politics as this deal makes no sense to many of us. Hopefully we can reverse this and with support from the ethanol industry bring our energy costs back in line. It also appears the Federal Reserve intends to raise interest rates several times in the coming year. This will be needed to help rein in inflation, but higher interest rates will have an immediate effect on agriculture. We have been somewhat spoiled in recent years with reasonable rates. That has helped most operations that need to borrow large amounts of capital. Going forward higher rates will need to be factored into those operations cashflow. The low interest party may be over for a while.