Mark's Market Talk

Oct 18, 2021

Last Tuesday the USDA released their October supply and demand report, and the numbers were bearish corn and beans. The trade expected them to lower the corn yield just a bit but instead they raised it .2 bushel an acre to 176.5. The record yield was 176.6 bushels in 2017. After a few usage adjustments the carryout ended at 1.5 billion which takes some price pressure off the corn market. Following the report corn traded down 10 plus cents on Tuesday and ended the week down 5 cents after we saw a 10-cent bounce on Friday. December corn continues to trade in a narrow band from 5.17 to 5.40. Slow export sales are holding a lid on while domestic demand holds up the support side. Corn harvest should reach the halfway point this week so the market direction may be known soon. The same report was more bearish the bean market as they raised the national bean yield almost a bushel to 51.5. This increase was double what the trade expected, and beans plummeted 30 cents on Tuesday. The ending stocks number went to 320 million bushels, 20 million more than expected. This tempered some traders desire to jump into the bean market and we continued lower until Friday when export sales of 31 plus million bushels pushed beans 11 cents higher. For the week Nov beans were 25 cents lower. Bean harvest is wrapping up in many of the major production areas and short lines at the processor’s plants are causing a bump in basis levels. This may continue until November when the commercials will start moving some beans. This will provide growers in our area that are still harvesting beans an opportunity to snag a few extra cents right off the combine. We are starting to see some interest in 2022 bean prices. The high cost of fertilizer may push people to plant more beans than normal next year which could greatly increase total bean production. Today local October 22 bean bids are in the 11.40 range. This might be a good place to start some sales. If the carryout number grows to more than 500 million bushels prices could quickly tumble back below 9.00. A lot will depend on the coming year’s South American crop. Their planting pace is currently running ahead of normal, and they are getting decent moisture to get the crop going. If they pull off a record crop this coming year it will put even more pressure on our prices. Just about everyone in our trade area is harvesting a record bean crop. That is giving you more bushels than ever to market. There is nothing wrong with taking a small percentage of these extra bushels and playing the market. However, we must remember that historically we spend very little time above 12.00 on beans. There is nothing wrong with cashing in and putting some money in the bank.