Mark's Market Talk

Feb 20, 2023

Old crop grains finished last week lower as March corn lost 3 cents and March beans were 15 cents lower. For new crop grains December corn was steady while November beans were 7 cents higher. There is a lot going on in the world and yet we don’t seem to be able to make any big moves either way. March corn did close above 6.85 once last week which was expected to break corn higher. However, we lost 8 cents the next two days, so that didn’t work. The slow bean harvest in Brazil is delaying the planting of their second corn crop. But that hasn’t been enough to push new crop corn higher. The answer may lie in the price spread between corn and wheat. Last week corn was still within a dollar of wheat which gives wheat the advantage for a feed grain in the western cattle feeding states. We are starting to see some corn export sales which is normal for this time of the year. Depending on the end use, wheat may disrupt the normal export market due to the current pricing. Old crop bean prices continue to hold their own even as we see more competition from newly harvested Brazilin beans. It appears that meal values are helping this. Argentina is the world leader in meal production, their short bean crop should push more meal business our way and help support bean prices. I saw a presentation last week that showed if all the new bean processing plants that are proposed in the US are built, we could process our entire bean crop in the future. Of course, they may not all be built so we can’t depend on this happening. Most of the oil from these new plants would be for renewable diesel that is expected to provide the US with more energy independence. It would also produce a huge amount of meal to either use domestically or export into the world market. Some might argue that the oil companies won’t allow this green oil to happen. However, several oil companies are major investors in some of these plants which shows they see the need for this “green oil” to happen. The USDA is conducting their annual outlook conference in DC this week. The trade will look over the numbers they release and we might see some price movement, but they will be more interested in the numbers in the planting intentions report that will be released the last week of March.