Mark's Market Talk

The markets closed mixed last week with July corn 16 cents higher while Dec was only 4 cents higher. The bean trade went south as July beans were down 60 cents and Nov beans closed 40 cents lower. Corn basis levels stayed steady as the upfront demand for nearby corn stays strong. China bought new crop corn almost everyday last week and it was large amounts. They have not cancelled very much old crop and probably will not until they know the status of the second crop Brazilian corn. New crop was hampered by improving conditions in the corn belt and the thought that several more acres of corn was planted then the USDA reported in March. Local new crop bids are just above 5.00 and maybe wavering just a bit. The funds have cut their ownership by 40 percent the last 2 weeks as some think a high has been reached in the corn market. However, we have a lot of time before harvest and with the variable weather we are seeing worldwide, nothing is a given.  Beans not only faltered on the board, but the nearby basis levels almost collapsed this past week. Some interior plants widened out as much 35 cents or more. They must have their immediate needs covered and perhaps they are hoping to lay in some summer usage at a better price. The crush report last week showed we processed less beans than the trade thought, which was odd as margins continue to be very strong as world veg oil prices stay very strong. It appears at this time it will take weather issues in the US this summer to send prices back higher. Right now, most crop acres in the major states look good with the potential to yield very well if we get good weather. Without any major world problems, the markets may keep trending lower until we encounter hot and dry conditions. But then, we may see them take off for no reason. We have seen a tremendous amount of volatility since last fall, why would we expect that to change anytime soon.