Mark's Market Talk
Jan 17, 2022
Last week the USDA released their January WADSE report. Normally this report is a big market mover as it includes a previous year yield adjustment. This report was somewhat quiet as there were not any huge differences compared to the average trade guesses. They moved some numbers around as far as supply and demand, but the carryout numbers stayed within a reasonable range. The next big market mover report will come in March with planting intention numbers. Between now and then South America weather will draw attention as hot and dry conditions have persisted in Southern Brazil and most of Argentina. Some damage has occurred, but some late season rains can still salvage some yield. Crude oil went back above 80.00 last week. That is bad news when you stop at a pump to fuel your vehicle, but it is good news for the ethanol business. Barring a covid shutdown we are on track to meet the USDA’s corn usage. Corn exports have been on the slow side but there is still a lot of possible sales to be made. Last year countries were buying early as the price was going up, this year they appear to be stalling thinking corn prices will decrease. Bean export sales are struggling as March delivered South American beans are priced 40 cents a bushel below us. Are they too low, or is the US price too high? It seems we are the price setter for the world and everybody else works off our number. If we were to lower our bean price 40 cents, Brazil would probably follow suit and it would go on and on. Brazil is modernizing their infrastructure and becoming more efficient getting grain to the ports and loaded on ships. That is putting more pressure on the US to make needed improvements here to our system or we risk losing more business. Last week March corn lost 10 cents. It would have been worse if not for the 9 cents we got back on Friday. It was the only grain in the green on Friday as soy, wheat, and oats were all in the red. March beans lost 40 cents for the week as the chance for rain in Argentina looked more promising.