Mark's Market Talk
May 10, 2021
The spring rally in commodity prices continued last week as contract highs were achieved for both corn and beans. July corn ended the week 58 cents higher while the Dec contract was 72 cents higher. The same took place in beans as July was up 55 cents and Nov finished the week 94 cents higher. The focus last week shifted to the new crop contracts. Basis levels are doing their part on the old crop supplies as end users compete for the tightening stocks. It appears we will not run out of corn or beans before harvest, but the available supplies may not be where they are needed so we could see a lot of grain movement in directions that are not normal. There have been reports of beans moving away from river terminals back to processing plants in the interior. The crush margins have been record high led by the bean oil value. This has encouraged plants to run at capacity so they can reap maximum profits. Ethanol plants that were struggling when corn was in the 3-dollar range now find themselves making decent money buying 7.50 corn. The big help there has been the tripling price of crude. People are driving more than they have for over a year creating fuel demand which should help sustain the ethanol business. The Biden administration is talking renewable fuels, but they need to solidify their talk by supporting the renewable fuel standards to the fullest level. We have all the energy sources we need right here in our own country; we do not need imported oil. Old crop marketing looks simple, sell it. You can always keep a small amount just incase we hit record highs so you can say you sold 10.00 corn, if it reaches that. You never have to tell how much or how little you sold for those prices to have bragging rights. New crop prices demand some attention as they are at very profitable levels. The planted acreage will no doubt increase compared to the late March numbers the USDA put out. The one area that could hold acres down is the Dakotas where rain has been nonexistent since last spring. Otherwise, it appears the crop is going in record fast. If the Midwest gets some general rain in the next couple of weeks the weather issues in this country may lesson some. However, if we stay dry and Brazil continues to burn up, we could see more of this historic rally. Just remember there is nothing wrong with your next sell being higher than the one you just made. But if you sit on your hands and watch these prices, come and go without participating, all you have left is the old saying could have-should have and that does not pay a lot of bills.