Mark's Market Talk for March 11, 2024

Mar 11, 2024

Last Friday’s USDA stocks report was about as boring as they come. US ending stocks stayed the same as last month for corn and beans. Corn was 2.172 billion and beans were 315 million bushels. Most analysts had predicted this, so it was really no surprise, right? The markets tried to trade lower after the release, which often happens with a neutral report, but in the last hour of trade things turned to the upside. Beans reacted to Brazil’s crop only being lowered 1 million metric ton, while most private numbers have been 140 to 150MMT vs the USDA’s 151. However, the report shows a decline in world corn and bean stocks, and it appeared that started the rally. Plus, we have been on a bubble since the first of the year and perhaps some shorts decided they better start evening up. At the end of the week May corn was 15 cents higher while beans were 33 cents higher. So, for the second week in a row, we closed higher. Can we continue to see higher prices? Anything is possible but when we look at the amount of unpriced grain hanging over this market, it might become a cat and mouse game among producers as each party decides his ability to handle risk in holding old crop grain. Today you can play cards both ways and one hand is a winner and the next hand is a loser. Basis levels are decent for this time of year. If a lot of grain starts moving that will relax as end users get bought up. But if enough people are bullish, grain movement stays slow as farmers hold out for higher prices. The next possible market mover report comes later this month with the prospective planting report from the USDA. Until then we will keep watch on the South American weather as they finish their first crop harvest and plant their second crop corn. Our weather will also come into play as we head closer to spring. The best advice may be to use percentage pricing and price some of your old bushels every couple of weeks or so. A decent average is better than a summer blowout if the new crop does well. And if it turns out you marketed some of it too soon and prices do recover more than expected, sell new crop bushels.