Mark's Market Talk

Jan 18, 2021

Last week was another exciting grain trading week as corn and beans were higher once again. Tuesday’s WASDE report was sort of a stunner on the corn side. The government lowered the 2020 corn yield 3.8 bushels per acre, plus they lowered the incoming stocks 75 million bushels. They moved some demand numbers around and the ending carryout estimate dropped down to 1.55 billion bushels which was 150 million lower than December’s report. That pushed the front 4 months up the 25-cent limit for the day. Wednesday, we saw things level out some as the trade just was not ready to go all in. At the end of the week March corn was up 35 cents while December gained 18 cents. US corn is still the cheapest and biggest supply in the world right now. Last week’s export number was higher than expected and this should continue for the next 3 or 4 months until we see harvested corn from other countries start showing up. However, we may start to see some price rationing in our country as ethanol and livestock feeders struggle to make ends meet with higher corn prices. Tuesday’s bean report was neutral the market as it came out very close to the trade expectations. The ending carryout was pegged at 140 million while the trade expected 137. They show us importing 20 million bushels of beans which will probably come from Brazil this summer. It may take this to keep our processors all going late this summer. For the week March beans closed 40 cents higher while November beans were 34 higher. It now appears likely we will see an acre war of some sorts in the coming weeks. New crop prices for corn and beans have both advanced the past couple of weeks and today it might be a draw which will be better. Meanwhile those with old crop grain have some excellent marketing opportunities in front of you. A rallying market should be fed. We saw a limit up day this week for corn, but we could not put a second day together. It might work different on the way down and at some point, these markets may act like a car without brakes.