Mark's Market Talk

Nov 22, 2021

The soybean trade was still trading off the new yield numbers last week as January beans closed 19 cents higher. Some view soybeans as a hedge against the growing inflation the US is experiencing. We see this occasionally in South America, but there it is typically the farmers holding the crop as a hedge against rising land and input costs. Here it is the speculator buying bean futures with a plan to ride the market higher. The fundamentals do not support beans increasing in value unless crude oil leads them higher. This past week oil appeared to peak and closed lower leading some to think we will rebalance the whole commodity mix in the coming weeks. Soy exports have been poor and with a South American crop running ahead of schedule we may have trouble beating the nearby highs we put in last week during Wednesday’s wild trade. Unless weather becomes an issue down south, they are on track to produce a record crop. It is amazing to see how world stocks have rebounded in a years’ time. Much of this is attributable to the use of technology that was developed in our country and is now being used worldwide. The corn market was a little quieter and ended the week down 6 cents. Basis levels continue to be strong as it looks like farmers are filling their own storage which is forcing the end users to pay up to keep their systems full. There will not be a shortage of corn in our area for some time so once the bin doors do open up we can expect to see basis levels widen out. Ethanol production is running at full speed as they continue to make near record profits. For this to continue we need fuel prices to stay high and no one wants that to happen. Canada and Mexico were both buyers of US corn last week and they will continue to be our best buyers. We can’t take these 2 countries for granted, they are 2 of our best trading partners in the world. With harvest wrapping up for most area farmers it would be a good time to review your marketing plan. This goes for both old and new crop bushels. It will take a pile of money to put next years crop in, especially corn. Therefore, we need a plan that will allow us to pay for the inputs and have something left over to live on. Give us a call and we can look at some opportunities that may help you achieve your financial goals.