Mark's Market Talk
Jun 28, 2021
Once again, we would have been better off to end last week on Thursday rather than Friday. We had a somewhat quiet week working until we got to Friday. A couple of things happened. Rain reports were good for the southern and eastern regions of the corn belt. It was also announced that the supreme court was siding with the small refiners in their lawsuit against the EPA concerning RIN waivers from 2018 that allows them to bypass blending ethanol and biodiesel into their fuels. This is a ploy of the big oil companies. There are not many small refiners and most of them are owned by large oil companies. It is all about political power and once again oil trumps farmers. For the week July corn was down 17 while the Dec contract closed 48 cents lower. July beans were 66 lower while Nov beans ended last week 43 cents lower. We continue to see massive liquidation in the grain markets as both the funds and speculators are exiting the market. The shift in weather for the eastern corn-belt has those with long positions concerned the goody is gone. However, the latest USDA drought report shows 41% of the corn acres and 36% of the bean acres nationwide are experiencing moderate to intense drought. Most of this area has missed the recent rains and there are some areas almost beyond help. We need to see at least trend line yields this year to keep our carry outs above a short position since we are already working with reduced stocks. All eyes will be on the USDA’s Wednesday acreage report. Private estimates have been all over the board. The average trade guess has the corn acres coming in at 93.8 acres which is 2.6 million more than the March report. The average bean acre number is 1.5 million higher at 89.1. It has been expected these acres would grow ever since the March report. Good planting weather has kept the prevented plant acres down so we will know Wednesday what the USDA says. I will close with a patriotic report that I witnessed last weekend. We were camping at the Bellevue State Park and attended the Clayton County Pro Rodeo Saturday evening. It was in the middle of nowhere on a gravel road but there might have been 3000 people there. It was a wonderful setting with most of us on lawn chairs on a long sloping hill above the arena. When the American flag entered the arena held by a lady on horseback, everyone stood, removed their hats and remained quietly at attention as a young person sang our national anthem. I did not see anyone kneeling or turning their back on our flag. It made me proud to be an American and proud to be part of a rural population that respects and understands what our flag really stands for.