Mark's Market Talk for February 12, 2024

Feb 12, 2024

Another rough week in the grain markets as corn ended last week 14 cents lower while beans fared a little better as they lost 3 cents. The February stocks report that was released Thursday was mostly neutral for corn and slightly bearish beans. But as normal that meant lower prices. The carryout number for corn increased 10 million bushels. They reduced bean exports 35 million, which was probably warranted, but they forgot to increase the domestic crush which has been running ahead of expectations. Therefore, the bean carryout increased 35 million bushels. Meanwhile the funds continue to sell off as they are now short almost 300,000 corn contracts and 130,000 bean contracts. Combined this is the shortest they have been for a long time. Farmers continue to be stubborn sellers as they wait this market out. Normally we see a fair amount of selling prior to March 1 when many farm and rent payments are due. If this happens basis levels may soften, giving farmers a double whammy. Many are asking if there might be a silver bullet somewhere that may turn things around. World weather problems would have the biggest effect on production, but right now we seem to be calm. The Ukrainian war has become less of a news item, even though fighting continues. However, their farmers are resilient just like we are, and they are finding ways to move commodities out of the country. The Chinese economy showed a very slight improvement last month and if it could right itself perhaps their imports would increase. Brazil keeps lowering the price on the commodities they are exporting just to make sure they are cheaper than the US prices. You must ask how their producers can keep taking less money for their corn and beans unless their government is heavily subsidizing them. The final question this week is will we see a rally that will take us back to profitable levels on our old crop grain. A betting man would probably say no as there is so much old crop still unpriced that grain sales will begin to happen long before we see high prices. Each person will need to select their comfort level for holding grain into the summer and act accordingly.