Mark's Market Talk

Jan 09, 2023

We are a week into the new year, and it appears the wind has left the grain market sails. After some decent moves in December, especially the bean market, things turned south this past week. March corn was down 24 cents while March beans lost 31 cents. Friday beans posted a 22-cent rally, otherwise it would have been a greater weekly loss. So, what brought all of this on. Some major factors included a much stronger dollar, A wet/dry forecast for Argentina, poor ethanol returns, and heavier farmer selling, especially beans.  If that wasn’t enough traders are positioning themselves for the WADSE report due out this Thursday. Everyone is certain they will raise the carryout for both corn and beans due to poor exports. Bean sales were running hot through harvest as China was forced to buy from us as we had the world supply and was competitively priced. In the last month their interest has waned as they are waiting to buy cheaper Brazilian beans in the near future. Corn sales have been poor for several months as there were other sources in the world including Ukrainian corn. We are just now coming into the sale season for US corn and hopefully we start seeing some meaningful sales. Domestic corn demand has been excellent since before harvest started. However poor ethanol margins will slow the processor’s appetite which will bring basis levels down. The increased farmer selling of beans has reduced bean basis 20 to 30 cents as the plants have filled a good part of their nearby needs. Once we get past Thursday’s report if there aren’t any wild number swings, the trade can turn their attention to the 23-crop planting. The USDA planting intentions report will be out in late March. This will give us plenty of time to discuss how many acres each crop will get. Somewhere during this there is normally a market rally. We all need to be on the lookout for this and be ready to reward it.