Mark's Market Talk

Oct 25, 2021

Last week we saw a two-sided trade as December corn gained 12 cents while November beans were 3 lower. The bean market was wild mid-week as they swung 25 cents both ways in 2 days’ time. The fundamentals say beans should be trending lower as the yields increase and Chinese buying slows. However, they have become a follower of the energy markets such as crude oil and veg oils. Those markets have been trending higher and beans are along for the ride. The issue will be when those markets slid backwards beans may roll all the way down the hill. Another negative factor is the perceived acre switch many see coming as fertilizer prices continue to soar and the cost of planting corn gets very expensive. If we see 3 to 5 million acres of corn go to beans our carryout numbers will grow fast. Brazil bean planting is off to a great start and so far, the conditions are good. Argentina on the other hand is very dry and planting has been delayed waiting for rain. Last Friday you could sell October 22 new crop beans in the 11.50 range. Should we plant a lot of beans this may be a good place to start pricing some new crop beans. If the US carryout grows above 500 million bushels it will be hard to keep beans above 10.00. Corn on the other hand appears to be more stable. The ethanol business is booming as the plants are making good money and demand is brisk. Exports have been a little disappointing to date, but many think the world will need some of our corn. Throw in reduced acres next year and perhaps we head higher. Beans won’t be the only commodity stealing corn acres. Wheat is becoming very attractive for the areas that can grow it and higher priced wheat will stop the feeding of wheat which creates more demand for corn. The last part of this harvest will be interesting to say the least. Most in this area will have harvested a record crop along with very good prices. We best enjoy it as southern Iowa doesn’t do this very often.