Mark's Market Talk

Oct 16, 2023

The USDA released their October report last Thursday and as expected it created some excitement. The trade expected them to leave the bean yield very close to the previous estimate of 50.1 bushels. The report lowered the yield by half a bushel down to 49.6. That doesn’t look like much, but it kept the estimated carryout at 220 million bushels which was bullish. The bigger mover on the bean side was a reduction in world stocks of 133 million bushels. That was well below the lowest estimate. Beans took right off after the report and ended 37 cents higher for the day. They gave 10 cents back on Friday and ended the week 14 cents higher. The corn numbers came close to what the trade was expecting as the yield was reduced by almost a bushel. That brought the carryout down 100 million to 2.111 billion bushels, which is not an overly bullish number. Some feel the yield will drop more by the next report due to the vast variability we are seeing on yields across the country. Corn ended the week up a penny as harvest pressure is hitting full stride. Basis levels slipped a bit last week as supplies became more available. You might ask if this report is the start of a long-term rally back from early harvest lows. And the answer might be a maybe. The harvest pace to date has been fast and furious, but we still have a long way to go. It was an odd weather year to say the least. Normally when we see an early and fast harvest we are dealing with a short crop. That isn’t the case for a lot of areas this year. The hot and dry August and September weather sped crop development and promoted an early harvest. Most of the corn in this area used the July rain we received to produce a decent crop. Somehow the beans found enough water to produce an average yield in most of our area. Meanwhile those that did see a little August rain have faired better. It also will be a year that farmers will fill extra bins at home with dry corn from the field. These bushels become phantom bushels as they are impossible to account for in any report. You might think this doesn’t amount to a lot, but it is amazing what some people will do to store grain without paying for commercial storage. Currently there is a carry in the grain markets which is something we have not seen for 3 years. That gives you some optimism of better prices down the road.