Mark's Market Talk

Jul 05, 2023

If you have been involved in farming the past 20 to 30 years, it is doubtful that you have seen a wilder USDA report than the one we got last Friday. The report contained a couple of huge surprises that had not been predicted by anyone. Their updated planted corn acre number of 94.1 million was 2.1 million acres higher than the March forecast. It was 2.2 million acres more than the average trade guess. Bean acres came in the opposite as the USDA says we planted 4 million acres less of beans than expected. If this is true it will have an impact. However, this report was as of June 1, and I am not sure how they counted the acres that had not been planted by that time. The amount of prevent plant acres this spring will probably be low as most areas were able to get things in. After Friday’s fireworks December corn ended the week down 93 cents, while November beans were up 33 cents. We often talk about rewarding the market at the proper time and now it appears for new crop corn that was June 21st when you had local bids in the 5.85 range. Today’s new crop corn is worth a dollar less. Flip that around on the bean side and even with a 78-cent gain on Friday, we still closed below what we were paying on the 21st.  Whether we agree with these acre numbers or not they are what we have to trade on until proven different. This is a game changer. Going into the report, the average trade guess had us planting a little less corn and a few more bean acres. The actual numbers were vastly different. With the dry weather causing low crop ratings it is expected that yield adjustments will be a bigger factor when they address it in the next report due July 12. With the additional corn acres added in they would more than offset a 5-bushel yield loss on the national average. So, acres matter. The loss of 4 million acres of beans along with a possible loss on yield could take the bean carryout down to pipeline supplies. Just a short while ago we were concerned about a rising carryout putting a price ceiling over the bean market. Now we may have a chance at some very profitable bean prices. There is no doubt that we will continue to see a large amount of volatility.