Mark's Market Talk

Mar 13, 2023

The grain markets pushed lower last week as they try to find support. May corn was down 22 cents while the December contract ended the week 13 cents lower. We did see a 5 or 6 cent bump on Friday so perhaps we have found a near term low. The open interest was larger which could mean end users are buying to protect their needs as we had dipped down below 6.10 on the May contract. There are still rumors out there that China is in the market for US corn, but we have not seen any confirmed sales yet. This should happen at some point now that our corn is competitive in the world market. Unsettled weather already has some thinking we will have planting difficulty this spring. I say it is way too early to get excited about that. The moisture we have received this winter has been a good thing as most of it has soaked in and will help the crop. Last week May beans dropped 12 cents while the November contract lost 15 cents. Old crop beans are still carrying good value as most of the world bean buyers are headed to Brazil. However, the poor crops in Argentina are lending support to US beans. They now predict the crops in Argentina may be the worst ever in modern times. They export most of the world bean meal so in order to fill these sales they will need to buy a lot of Brazilian beans which will help control some of their record crop. New crop beans have faded in the past month and are now in the 12.90 to 13.00 range locally. Still not a bad place to start some pricing as a lot can happen between now and harvest. By now most of you have heard we had a huge bank failure last Friday. Silicon Valley Bank was closed by regulators as they were not able to fulfill their obligations. It appears they were a bank of choice for a lot of large startup companies. As interest rates have shot up recently, the failure rate of their loan customers increased which put too much pressure on their balance sheet. It was reported this is the second largest bank failure in history. The Dow was down 345 points Friday settling at 31,909 after a week of losses. The fed appears intent on more interest rate increases which will push the value of the dollar higher and make our products higher in the world market. I point this all out not to be all gloom and doom, but to remind everyone that our grain markets are affected by a whole slew of worldwide issues. We can not just concentrate on what is happening in our back yard.