Mark's Market Talk
Sep 05, 2023
Labor Day is behind us and hopefully we have had the last of the extreme heat for this year. The current debate centers on how much crop damage has happened the past 3 weeks due to heat. We will start getting some answers soon as harvest is set to kick off in the next 2 to 3 weeks. There is no doubt the heat has cost us some bean bushels. However, it can be argued that most areas were headed for an above average crop and now they may be back to average. Will that allow us to produce a national average of 50 bushels per acre? At that level with current demand projections, we would keep the carry out above 200 million bushels which is a little bullish, but not much. Every bushel plus or minus is 74 million bushels, so it is easy to say if we lose a bushel or more per acre it suddenly gets exciting. It will take a bigger change in the corn yield to make a noticeable difference in the carry out. The lower corn prices have brought some export sales which have been helpful. In the past we could always depend on exports picking up the slack this time of the year. Now as Brazil has become the world’s leading exporter of corn, we have become second fiddle. That throws a double edge sword into things. Reduced yields should increase the price of corn, which in turn may hamper exports and the carry out stays in the 2-billion-bushel range. We need that number to fall to 1.8 billion or less to prompt higher markets. We will get more answers as we go forward this fall. Perhaps we will see an early season low and have steady to higher prices as harvest progresses. Last week we saw corn lose 7 cents while beans were 19 cents lower. Old crop basis fell as we approach early harvest pressure. The new crop basis has been staying steady to date, however if we see a lot of grain moving in the next month they may weaken also. Higher interest rates will have an influence on prices as everyone will be pricing that into their formula. Coming into harvest I want to remind everyone that we will adjust our hours as needed to accommodate your harvest schedule. Keep us informed and we will do what we can to help.