Mark's Market Talk
Sep 25, 2023
It was easy to see where the funds were last week in the grains. December corn ended the week a penny higher while soybeans were down 44 cents. The funds are short the corn market 145,000 contracts while they are long 45,000 on beans. Last week they shed 28,000 bean contract which with some early harvest pressure caused the bean market to go backwards. Late in the week we did see some quick ship bean bids as rain stifled the bean harvest. There have not been enough beans cut yet to say where the yield will end up. So far, the local yields we have heard are ok, just not overly exciting. 1 to 2 inches of August rain would have made a huge difference and we would be talking 70 plus bean yields. August was dry in most of the Midwest so we might see the national yield fall back just a touch more which could shrink the carryout below 200 million. That would help stabilize the market and probably send it back into the teens. Low export numbers continue to haunt us as South America is still shipping beans from their large harvest. Normally at this time of the year we have the remaining world stocks and exports are easy. Corn exports have been very slow as the world continues to find cheaper supplies. Ukraine resumed loading wheat ships last week Some of this wheat is feed quality so that will reduce corn demand in the markets it is headed to. All this uncertainty is making it difficult to come up with a good marketing plan. The last 2 years you did not need a plan to be successful as the markets gave us lots of profitable opportunities. Today it is tough to make money on grain sales. Several producers are asking what to do. The current depressed cash market is not very appealing, but when you add up the cost of storage and interest it will take a decent rally to make storage work. That could be triggered by the dry weather in South America or a reduction in this fall’s yields in the US. It is usually not good when you wish for bad things to happen in order to help your situation.