6/4/18: Mark's "Market Talk" Blog

Trade talks take a step back, planting progress surpasses 5 year average, and initial corn ratings come in higher than expected.

The above statements are all bearish the corn and bean markets. We went into last weekend with a touch of optimism with the record heat and impending dryness leading the way. At the time it appeared we were on track to solve most of the tariff disputes which gave traders some confidence. Then we come back to work last Tuesday and find we may had put a second top in this market the Friday before as trade talks struggled and now the ship is taking on a little bit of water. For the week corn was down14 and beans were down 20. Basis levels were a little better for beans and a little wider for corn. The past 2 years we have put a growing season high in during the later part of June. Some think it may have come early this year. Others point to the record heat we have had the past week and the forecast for more heat in the next 10 days. The dry area keeps getting larger and though the crops look excellent right now they will require rain in the near future. The export demand for corn continues to be strong and if we could tie down this NAFTA agreement it would be even better. Bean exports have been a little better the past 2 weeks but the bulk of the activity remains in Brazil as they are pricing their beans under the US. Come August that supply will be winding down and the world should be back at our door step with money in hand. There are some wide differences in the long term forecasts for the central US. It appears the southwest and western areas will be dry this summer. The unknown is how far east this will come. If we were to have a dry June like we saw last year these markets could get real exciting real fast. It will be wise to keep an eye on things and take advantage of any pricing opportunities that come your way.

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