Mark's Market Talk
Jul 26, 2021
There has not been anything close to normal about the commodity markets for almost a year now. It started with the 2020 September WADSE report when the Government first admitted they had overstated the previous 2 corn crops. Those of us in the business suspected this, but the board can only trade the information given them. Therefore, commodity prices had been dragging for 3 or 4 years. We had some production issues the years we are talking about and at the time the USDA seemed content to act like it was no big deal. Once the first correction was made the markets trended higher throughout harvest and then post-harvest we saw a large increase in export sales, especially to China. From there we saw a worsening drought in the western and northern plains and that added a little fuel to prices, and we went up a little more. During this time we have seen more price volatility than any year on record. Several times we have seen such a swing in the weekly close that you either thought the crash was here, or we were headed to the top. We are now at a point that the corn weather market has about played out until we get some early harvest numbers. That’s not to say we won’t see a spark if the hot dry weather hangs on into mid-August. Meanwhile beans still have some time before the final yield is established. Most of us in this area saw firsthand last year what happens when you have a dry August and early September. We easily lost 5 to 10 bushels of bean yield and probably more in some areas. The weather seems to be more unpredictable than ever. The word normal comes up again. How can say what normal weather really is. The variability in the weather is one of the major factors driving the grain markets. We saw that last Friday as traders sold off before going home as they were concerned the forecast could weaken to cooler and wetter before Monday. December corn was down 18 cents last Friday and ended the week 9 lower. Beans were down most of the week and were 43 cents lower at the end of the week. This week may turn out to be a pivotal week market wise and it will all be weather driven. I advocate wearing a seat belt when in a vehicle. It might be wise to strap in when you check the markets this week.