Mark's Market Talk
Jul 24, 2023
The war in Ukraine escalated last week as Russia bombed some Black Sea ports and did serious damage to some grain facilities. This stopped any ship that was even thinking about entering the Black Sea corridor. Insurance companies have pulled any coverage they may have been offering to these ships. One report noted that 60,000 tons of wheat was destroyed in an attack. This news coupled with a hot and dry corn-belt forecast had the markets on a rapid rally the first 3 days of last week. Things cooled off a bit on Thursday as traders appeared to be catching their breath. Friday, we saw some profit taking in the corn and wheat trade, while beans were only slightly lower. At the end of the week December corn was up 23 cents, while November beans ended the week up 31. It could have gone either way heading into the weekend with temps expected to reach toward 100 this week. Some of the forecasts showed a little rain mixed in with the high temps and that may have been what kept the trade form going longer the market into the weekend. If the heat appears and the rain does not the rally could start back up this week. Every week gets us a little closer to harvest and the water needs become less. If you read the crop reports in the Iowa Farmer or Fam Bureau Spokesman last week, just about all of them commented how much good an inch or 2 of rain did for their crops. Granted this was during a time of moderate temps and the heat this week will take a bigger toll. It is safe to say that for the most part corn yield estimations will be better known 3 weeks from now. It will take more time for the bean crop as late August rains can add bushels. If you missed the rally last week and we get another chance this week it might be wise to get some crop priced. Demand for US grain is not strong right now. A smaller crop may not make as big of a difference as we think it will. However, if prices do decline some more perhaps we will see a big uptick in export demand which would definitely help us in the long run.