Mark's Market Talk

Mar 15, 2021

The give and take in the grain markets continued last week as corn and beans both experienced wide trading swings almost daily. However, we did not stray too far as May corn ended the week 6 cents lower while Dec corn was 2 cents lower. On the bean side May was 16 cents and Nov beans closed 2 cents lower. South American weather was about the only market news last week. Brazil is such a huge country, and their growing area reaches a long way from north and south. Just like our country they have different weather systems that affect different areas. Sometimes when a weather situation is predicted for a certain area it is assumed by some to mean the entire country is experiencing the same weather. That appears to be the case recently as production problems in some areas are overshadowing the above average production in many areas of Brazil. True they have had their share of weather problems this year, but we have proven in this country that we can produce more than expected even when the weather is not the kindest. There is also the question of who is providing the most accurate analysis of their weather. Commodity trading firms sometimes pick and choose whose forecast they promote as volatility is good for these companies. A quiet market does not bring outside money into it. You need the prospect of either great production or possible crop failure to get the money people involved. They can trade either side of the equation. Producers do not particularly like how the board of trade works, but we have never developed a better system. For the board of trade to work we need the funds and speculators that are willing to invest their money to provide producers a means to price their commodities. These traders use charts, historic fundamentals, world news, and world weather to make their informed decisions. Too often producers use the seat of their pants to guide their marketing decisions. Knowing your cost of production is the first step in developing a successful marketing plan. Knowing that allows you to determine a profitable price that you can focus on. The new crop prices being offered today are at a profitable level for most everyone. It is a good place to start pricing with the hope that the next sale is higher. If you wait thinking you can hit the high you will normally be disappointed. Only a few lucky producers hit the high in any given year. Most will not know when the high is reached and will sell on the way down, I think we can all say we have been there, done that.