Mark's Market Talk
Jun 05, 2023
Last week grains ended mostly higher after starting out dismal on Tuesday following the Memorial holiday. July corn ended 5 cents higher while December corn was 7 higher. July beans got a 15-cent bounce higher, and the November contract was 6 cents lower. Weather is and will be the major player. A lot of the corn belt is on the dry side. Current forecasts continue to lean to the dry side and the temps are headed higher. As farmers we spend most of our time trying to produce one bushel more than our neighbor. Commodity traders spend most of their time studying the weather, world events, government reports, anything that gives them a clue where the markets are headed. Therefore, I like to watch the commitment of traders’ reports each week that shows where the trade is heading. This past week they have cut their corn shorts in half and are now 51,000 contracts short. On the bean side they have their position down to even. A couple of months ago they were 100,000 plus long. I would read this as they feel the corn crop is under stress and they now want to buy in so they will be positioned for a short crop. There was some negative news this week on bean carryout as the number continues to grow. It is too early to lose a bean crop to dry weather so many bean traders are being protective. We can spend a lot of time predicting where these markets are headed, but again the weather will be the driver in the near term, so unless you can forecast the weather better than the TV guys, we just as well talk about something else. We always talk about being ready to move, now is the time to be prepared. For those with old crop the basis levels have remained strong. But the end users are already counting the days to new crop bushels, and they cannot wait to narrow the gap to new crop prices. New crop prices have not been very exciting and very little has been sold. Many times, the crowd is headed the wrong way so just because others are not pricing new crop, don’t let that keep you from making a start somewhere and then ratcheting higher on later sales. A side comment would be the live cattle trade. It reached a record high last week as finished steers were bringing 1.80 plus live weight. Many years ago, we sold some fats for 60.00 and thought we had hit a gold mine. My how things have changed.