Mark's Market Talk
Oct 10, 2022
Corn and beans ended last week higher on the board as corn was 6 cents higher while beans finished the week 2 cents better. Interior basis held steady while the river basis continued to collapse due to low water conditions. This has become a very serious thing as traffic on the Mississippi has been greatly affected. Barges are being loaded light so they can maintain enough draft to stay afloat. This is also posing a problem getting fertilizer up the river which will cause supply issues later during the fall application period. Export sales for beans have been good and now we may face a problem getting them to the ships in New Orleans in a timely fashion. Basis levels in the plains area have improved as more grain heads to the Pacific Northwest for export. Mississippi barge freight, which was already inflated due to rising fuel costs, have increased big time due to the low water. This cost is being absorbed by the farmers selling their grain to the river markets. It is doubtful that the low water issue will be corrected this fall as current forecasts do not show a lot of rain chances. Rail lines are already struggling to move freight, so they are not a likely substitute for barges. This just adds to all the weather and political issues we have fought with this year. The USDA will release their October supply and demand report this Wednesday. The trade is expecting lower carry outs for corn and beans. Some see a less corn acres being harvested for grain due to the number of acres that were chopped for feed. Yields will be discussed as many feel corn yields should be lowered some more. Early yields in our area have been very variable. However, it seems a lot of producers are saying their yields are a little better than expected. In many cases they had lower expectations going into harvest due to the lack of rain and it appears the improvement in corn hybrids have made a big difference. Wednesday’s report will give us some near-term guidance in the markets. Long term will be affected by the world economies and politics. Everything from our elections, we only have 30 days of campaign promises remaining, to the war in Ukraine will influence the commodity traders. Our job as producers will be to stay abreast of all this information and make good marketing decisions. It all sounds easy, right.