Mark's Market Talk
Oct 03, 2022
The USDA released the September stocks report last Friday and once again they shocked the trade. They were expected to lower corn stocks and they did lower them, 120 million bushels more than the trade expected. This included a reduction of 41 million bushels for 2021 production. The narrow basis levels this summer and early fall had told us old corn was tight and this confirmed it. Corn shot higher following the report and traded more than 20 cents higher before settling 8 higher at the end of the day. Had the bean report not been so negative corn might have gone to 7.00. The bigger report shock came on the bean side where the USDA raised the stocks to 274 million bushels which was 30 million above the trade estimates. So, while corn headed higher beans went lower and closed the day 46 cents lower. This number will be debated as many are asking where these beans have been hiding. The bean pipeline was sucking some air in late summer as end users went after supplies. A farmer would have been very bullish to pass up the high bean prices we have had. Now that there are ample new crop beans basis levels are returning to normal and if this USDA number is correct, we may see more correction as we go thru harvest. Corn gained a penny last week while beans lost 61 cents. We should see harvest ramp up the next 10 days as more crops reach maturity and the weather is forecasted to be harvest friendly for the month of October. Yield reports continue to be very variable on corn with the quality of the dirt being the biggest influence. Early bean yields in the area seem to be surprisingly good compared to what most expected. The question is whether the later maturities will be even better since the late season rain might have helped them. Corn seems to be slow to dry in the better yielding fields. We need to remember that most of the corn was planted 3 weeks late. We thought the heat would have put us back on schedule, but where the corn had better dirt along with fungicides the dry down has been slower. Stalk strength is suspect in most fields due to water shortage. We may need to trade drying expense for yield this year.