Mark's Market Talk

Feb 27, 2023

After trading in a narrow 10 to 15 cents range for months, March corn lost 28 cents last week while the December contract was 20 cents lower. The tipping point may have come from the USDA outlook conference where they predicted 91 million acres of corn will get planted along with a record yield. This pushed their projected carryout to 1.9 billion which is a healthy increase from the present carryout. A lot will need to go right to make this all happen, but we also need to realize that some traders are predicting we may plant 92 million acres. The drought monitor map is starting to shrink as more areas have received some moisture this winter. This may translate into the higher predicted yield. On the flip side we keep hearing that the second crop corn planting in Brazil is running way behind and may pose production problems there which would give our export business a needed boost. The Ukrainian war is now in year 2 and the news from the Black Sea can be bent however you want. Some tout the amount of grain being moved out while others talk about the huge line of ships waiting to load. Whichever side is correct it doesn’t appear to be a huge influence on our markets currently. The bean market was less of a problem last week as March beans were 2 cents higher while the November contract was down 12 cents. We keep hearing that old crop beans are on borrowed time and yet they continue to shake that off and keep holding their value. Terminal basis has softened as we have seen a lot of farmers selling recently. Meanwhile new crop basis is currently holding normal values for this time of the year. The USDA conference projected bean acres would stay the same as last year at 87.5 million while they predict a record 52 bushel yield. That would add 65 million bushels to our carryout. This could be problematic to our prices going forward.