Mark's Market Talk

Sep 20, 2021

The grain trade volatility was a little less last week as the trade awaits more actual yield information. Dec corn was 10 cents higher while Nov beans were 2 cents lower. The push on corn prices came from some reports of some heavy disease pressure in the eastern corn belt that was reducing yields as much as 20 bushels or more. This is occurring in areas that were thought to have record yields. It is still unknown how widespread this is, so the true crop reduction is not known. However, this news led some analysts to lower their expected corn yields clear down to 170 nationally. That would be very dramatic. It appears way too soon to jump on this bandwagon.  The same news may show up in the bean trade. Early yield results are limited at this time. For every outstanding yield being reported, there is an off setting one saying diseases like white mold and sudden death had cost them 10 bushels. August rainfall, or lack off, is also affecting bean yields. Meanwhile the aftereffects of Hurricane Ida continue to hamper shipments out of the port at New Orleans. Loading did resume at some terminals this past week, but it is expected to take a month or more to clear the backlog of barges that are backed up the river. That will cause delays upriver in getting grain loaded and on its way south. This has and will continue to hold a lid on the river basis. The river demand this past summer has been a huge driver in grain prices throughout the Midwest. The question now is will there be enough time left in the shipping season to get what must move down the river on its way. This could have a huge affect on fall basis if we have any hiccups such as low river flows this fall. We are seeing some carry in the markets which has been absent the past 2 falls. That tells us the end users are confident they will buy adequate stocks this fall without offering big premiums to entice selling. We also know that farmers change their minds, sometime rather quickly. That could mean that part of the crop that we planned to buy across the scale this fall, ends up getting binned. If this should happen, we could see nearby basis levels improve as end uses suddenly need additional stocks. It would be fair to say we could easily see more volatility this fall than normal. It would make sense for that to continue as we finish up a wild marketing year.