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Mark's Market Talk

September 28, 2020

An active harvest week equaled an active board of trade last week. Unfortunately, after several up weeks, we moved lower in the grain markets. Corn was down 13 cents for the week as early harvest pressure gave the board reason enough to take a breather. Corn has slowly risen off their mid- August lows and even after a down week we are still 45 cents higher than we were. Yield uncertainty continues to cloud the grain markets. It seems for every producer reporting a poor yield, you hear one that says it was better than expected. The USDA lowered their yield predictions earlier this month and chances are they will leave it alone till harvest is mostly done. New crop corn is allowing the end users to take some of their quick ship bids back toward a more normal fall basis. In most areas it might be one to two more weeks before corn harvest gets going full speed so there might be some cash sales opportunities yet. Longer term, exports will play a major role in how the corn market moves once harvest is complete. We are currently running at a record pace. However, we need to in order to make up for the reduced ethanol production. The proposed rule to allow E15 to be sold through existing E10 pumps may or may not take off. Right now, the price advantage is around a penny and it needs to be closer to 3 cents to get people converted. Hopefully, it will take off and corn sees a big benefit from it. Some would say the bottom fell out of the bean market last week, but when you look at what has happened in this market, it is just a correction. If we go back to an April low in the November contract, we had advanced over 2.00 before they fell off 42 cents last week. Harvest pressure is part of the reason. After buying beans almost daily for weeks, the Chinese did not buy everyday last week. I do not think they are done, but they might be close to filling their needs prior to Brazil’s next harvest. Dry weather in parts of Brazil is slowing their soybean planting progress. They primarily plant long season beans so the delay will also delay their second crop corn planting later on. Both issues may provide the US a chance to capture more sales worldwide for both corn and beans. In the short haul cash sales of both crops early in the harvest may be a good thing to do and save your storage space for the real harvest pressure yet to come.  
Posted: 9/28/2020 2:11:26 PM by Rob Matherly | with 0 comments

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