Mark's Market Talk
May 08, 2023
After a couple of weeks of lower grain markets, we finally saw some price recovery this past week. Friday was a green day throughout the board as all commodities were higher. For the week July corn was almost 12 cents higher with the December contract 7 higher. July and November beans were 17 cents higher for the week. These advances occurred while planting progress continued during good weather. The northern plains are starting to warm up and dry out some and planters are rolling in some areas. We didn’t think anything would get planted in some of these areas till mid or late May. There still will be areas of prevent plant, but that area is currently shrinking. The parties involved in the Black Sea corridor have been meeting, but as of this writing no agreement has been reached. The current agreement expires on May 18. There was a report that there were some fists thrown during one of the meetings between Russia and Ukraine. These countries are at war, should we expect anything less. The new crop corn is treading water as local prices are now sub-5.00. A banker told me this week that some of his customers are looking at a break even in the 5.50 range. That probably isn’t too far off considering the high cost of inputs and the increased land values. It will either take some price improvement or a huge crop to balance this out, maybe some of both. We have been working with a large inverse between old and new crop. These 2 prices always come together at some point prior to harvest. At this point the old is slowly edging down toward the new crop value. It appears the trade is willing to do this and let basis levels control the old crop flow to market. We have dealt with 2 years of above average crop prices, right now it appears this may not continue into the 23-crop pricing. That means it will be more important to set realistic price goals and market some crops when they are available. This week we will get the May supply and demand report. It will update the current supply and give us USDA’s first look at this falls balance sheet. This could easily be a volatile report. As farmers we will be optimistic that we will see a bullish report. However, the funds are looking for something different. They have gone short the corn market in a huge way the past 2 months. They have also cut their long bean positions in half. As always there will be winners and losers and blood will be spilled. Lets hope it isn’t ours.