2/5/18: Mark's "Market Talk" Blog

The grain markets cooled off a bit this past week after 2 weeks of increases. Corn ended up within a couple of cents of where it was the Friday before. The March contract closed above 3.61 so it appears we may have crossed a threshold that may bring us some better prices. However basis levels at some of the major terminals widened this week as they saw more movement so it’s the old catch 22 for producers as better prices bring less attractive basis opportunities.

We did see some good export numbers for corn last week as we continue to have the cheapest corn in the world. The weather in South America that had fueled a bean rally until this week may be bigger news to corn prices. The dry weather in Argentina has hurt their corn crop. Meanwhile wet weather is slowing the bean harvest in parts of Brazil which is delaying their corn planting. Both issues may help corn prices into the summer months.

The next market mover will be the March planting intentions report which should show less corn acres being planted this year in our country. Producers should reward these small bumps with some sells rather than holding their entire hand for summer weather problems.

Beans gave back some of their gains last week as exports were very poor. Today it looks like we will not meet our projected amount of exports in the current marketing year. If this holds it will push our carryout back above a comfortable level. As dry weather affects the Argentina crop, better conditions in Brazil is helping their bean crop. When it’s all combined their crops may easily be average or better keeping the world surplus on the high side.

The set back in the stock market this week wasn’t good news for those with a 401(k), but it may help pull some money into the commodity markets. Oil looks to be prepared to go higher than expected and normally other commodities follow along for the ride. Let’s hope that will be the case this year. Better crop prices will be needed to offset higher fuel prices. It will be a couple of weeks before I write some fresh comments. Hopefully we will have better markets to discuss.   

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