Mark's Market Talk
Jan 11, 2021
Another week of higher commodity markets as March corn ended last week 13 cents higher while March beans were 63 cents higher. This makes 5 weeks of higher closes and you must go back a long time ago to find anything similar. Once again beans led the charge as we head into this week’s WASDE report. The average trade guess is the bean carryout will come in at 139 million bushels. That would put the supply very tight and with the huge domestic demand we have it could lead us higher still as the market searches for a price that invokes rationing. Livestock producers are getting caught up in this as their feed prices are going up every day. There is only so many alternative feed grain or protein sources, and right now they are all going higher. In the old days of hog production, the in and outers would be selling the sows and hauling their corn to town. The modern integrators cannot change course that fast, but they are businessmen so they will have to evaluate how they proceed. This comes at a time when China is rebuilding their pork production which means down the road, they will be importing less pork from us. The corn market has been following beans higher, but at a slower pace. However, there are some positive things to help us along. Our corn is still the cheapest buy in the world, and we have the only large supply available. The variable weather they are having in South America is creating some production concerns for both corn and beans. The next 6 weeks will be very important as their first crops start to mature, and they work at planting their second crop. The possibility of further COVID-19 19 shutdowns is in the back of many people’s minds. Crude is trading above 50.00 which is good for ethanol, but parked cars don’t burn much gas, so we look forward to the time these restrictions go away and travel and eating out gets back to normal. With the report coming out Tuesday, this could easily be a firecracker week in the markets. Better strap in.