Mark's Market Talk

Mar 06, 2023

Even though we closed lower last week, we did see a decent bounce Thursday and Friday on the May contracts. May corn was 9 cents lower while December was a nickel lower. May beans were steady, and the Nov was a penny lower. The 6.25 support on May corn held and now it’s a matter if we can rebound to 6.50 and beyond. Some of the late week help came from rumors that China was looking to buy US corn. As of Friday, it was still just a rumor. However, it would make sense for them to buy from us as we currently have the cheapest corn on the world market. They also know they will get quality grain here compared to some of the grain coming out of Ukraine. The open interest in corn was strong as it appears end users are pricing some needs knowing we must get our crop planted before they might see some strong weakness down the road. Local corn basis levels have remained steady for several weeks. If you were in western Iowa, the basis is more than double what it is here as they search for drought shortened supplies. Old crop bean prices have stayed strong as the Argentina crop shrinks and the Brazilian harvest has been slow. The harvest pace will pick up and soon the world could be awash in new Brazilian beans if their yields turn out as good as predicted. Bean basis has softened a bit as the processors have bought plenty of beans for the next month or so. Farmer bean selling has been brisk lately as they take advantage of the price run up since fall. Meanwhile local new crop bean bids are above 13.00 while corn is still dragging in the low 5’s. We haven’t run out of time for an acre war, but it needs to occur in the month of March. The spring discovery insurance prices for corn and beans were set last week. Corn came in at 5.91 while beans were 13.76. Last year they were 5.90 for corn while beans were 14.33. In the end last fall we used the fall corn price of 6.86 and the spring bean price of 14.33 since the fall price was lower at 13.81. Where will we end up this year?