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Mark's Market Talk

October 5, 2020

This past week the USDA released the annual September stocks report and it sent the markets higher. For possibly the first time in history they made a major adjustment in the June corn stocks number. Many of us have felt they have over- estimated the US corn production the past 2 years. Normally they do not change numbers like this once they have been released. However, in this case I think it I think they finally realized it needed done in order to set things right. If all the corn they were saying was out there existed, basis levels the past 3 months would have been wider. The corn stocks number they released was 255 million bushels less than the trade expected. This report was a game changer and there could be more to come as we wait for actual yield numbers in future reports. They will now take the reduced stock numbers for corn and beans into the October supply and demand report that comes out this Friday. We should see lower ending stock numbers for both corn and beans. When you add in a record pace of exports and good domestic demand the future looks brighter than it has for some time. At the end of last week, we were 14 cents higher on corn and 17 higher on beans. Terminal basis levels are starting to gap wider, but they are still narrower than normal for this time of year. If the weather cooperates, the next 3 weeks will be a huge harvest period which may pressure basis even more. The runup in prices have many producers reexamining their marketing plans. If you had posted 3.50 corn and 9.50 bean prices 2 months ago for fall delivery, you may have run out of contract forms. Now we have producers concerned if they sell now, they will miss the high. They may be correct but if you do not sell now on the way up you may miss the entire opportunity on the way down. It is far better to sell on a rising market and hope your next sell is higher than the last. If you miss out completely your check book will be full of should haves and could haves and they do not pay many bills. 
Posted: 10/5/2020 1:51:04 PM by Rob Matherly | with 0 comments

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