Mark's Market Talk

Jun 06, 2022

After several weeks of higher grain markets, we saw some deep losses last week. July corn ended the week 50 cents lower while the Dec contract was 40 lower. July beans were 34 cents lower while the Nov was 17 lower. July wheat lead the markets lower as all exchanges were around 1.14 lower on the July option. There seemed to be several items coming together to make this all happen. We have been trading the war in Ukraine for about 16 weeks and most of that was bullish commodities, now it appears some grain will start moving from that region. Russia is not getting the conditions they want to allow this to happen, but they seem to be easing things just a bit to save them from more worldwide disdain. The latest reports from Ukraine say they planted more spring crops than expected which was bearish news to the markets. Delayed planting in this country was adding some premium and now we are at the 5-year average which is also bearish. However, a lot of the crop was planted 2 or 3 weeks later than normal so we are still at risk of less yield this fall. Inflation continues to affect prices, but it might become old news to the trade. Oil has been the leader to this point. The US government keeps threating to rein this beast in, but to date it has not happened. At some point OPEC will start pumping more oil which will slow this down a bit. Of course, lower oil prices will be negative to the corn market, but I think we all agree this rapid inflation is not doing any of us any good. So, what does the near future hold for the grain markets. It is easy to ask the question, but very difficult to answer. The weather in our country will play a huge role this summer. World supplies in all commodities are a little tight. If we experience a hot dry summer and come up below trend line yields, we will see more volatility. The flip side would be that we have excellent weather, and we all recognize the ability of today’s hybrids and varieties and how well they can perform if they have adequate water. In farming every year is a little different but staying profitable continues to be the ultimate goal. This year will require more thinking. We know we will handle a lot of money, the trick will be to keep more of it in your pocket.