Mark's Market Talk

Oct 11, 2021

We saw the markets tread water most of last week and finish the week on a down note. Last Friday we went out of the overnight on a higher note and traded that way until mid-morning before corn and beans both headed down. We can probably blame going into a big harvest weekend for the change of direction. There was also hope that China would be in the export sales report as they came off a holiday week. When that didn’t materialize the bears took over and we saw some mild liquidation. December corn closed the week down 11 cents while November beans were 3 cents lower. This week we have the October stocks report and the expectation is for a small decrease in corn yields while the bean yields are expected to increase. The bean market is already under pressure as export sales have slowed while expected production is growing. South America weather at this point is non threating as their early planting season begins. The entire world is dealing with huge increases in fertilizer prices, and this may shift acres to beans. The veg oil market has been the one bright spot in the soy complex. Higher crude oil prices are helping the biofuels business. Now if the government will step back and allow the current blending mandates work perhaps we can have a vibrant ethanol and bio diesel industry. The fast pace of harvest is starting to weigh on corn basis levels as plants are finding more available supplies. Meanwhile bean basis has increased as the bean harvest in many areas is finishing up and now the processors have to lure grain out of bins. The one shinning light in the grain room continues to be the oat market. December oats closed the week 62 cents higher at 6.59. This is a true supply and demand market. The major oat growing regions had a tough year while the demand for food grade oats remains high. Anyone who is carrying some oats may have an opportunity to cash in as the demand for all classes of oats is high.