Matt Bennett’s Mid Week Comments

Good Morning!

I hope things are going smooth for you this week. It’s been a cold week around here, especially as compared to a week ago. We even had snow on Wednesday…but it was mostly gone by the evening as the ground was too warm to keep it around long. My kids have grown up here in central Illinois without much snow, which is a sharp contrast to how I grew up. I was born in 1974 and as a kid…we had big snows about every year. Maybe it’s global warming, maybe it’s cyclical…either way, I can’t say I’m that upset about it but it is an interesting observation. A good heavy snow would surely help some folks get more in the Christmas spirit I’d assume. Speaking of, hopefully you have most of your Christmas shopping taken care of…as we’re running out of time! Fortunately for me, my wife does the majority of the shopping for the kids…other than the toy tractors and Illini gear. 😊 As always, please keep me posted on what’s going on around your place.

The corn and bean markets had a nice overnight market going after a good session on Tuesday. However, the bean market tried to bust through $12 once again and just couldn’t get it done. Corn held onto gains but beans settled slightly lower on the day. With weather reports mixed out of South America, it seems like many are realizing both corn and bean crops in Argentina have suffered some setback while Brazil’s first crop has also been damaged enough to warrant crop estimates sliding a bit. Time will tell but the trade is watching closely. Outside markets were likely mixed in their impact on the ag markets on Wednesday. With Jan crude up 20 cents on the day, we closed at $47.82. The Dollar settled slightly lower after being sharply lower early in the session. The Dollar settled .05 lower at 90.359. The DOW ended the day 42 points lower, setting at 30,161.

Corn – The corn market saw nice gains on the overnight market which was faded a bit by the day session. March corn held onto some of the gains and settled up 2 ½ cents at $4.27 ¼. This was 2 cents off the high and 3 ½ off the low of the day. The EIA report from the Department of Energy showed corn usage for ethanol down around three million bushels at just under 97 million bushels on the week. With ethanol stocks continuing to build from levels from both a week ago and last year, there’s plenty of concern about lack of driving over Christmas. Part of the reason this corn market is performing so well is not just the concerns about South American production. With demand strong and basis levels remaining competitive, it’s apparent there will be areas where a plentiful supply of corn won’t be the case. Some angst amongst end-users has been noted of late with many systems offering ‘free-dp’ as well as opening up January contracts for delivery. Once the rush of Jan corn settles, we could see some bidding for old corn occur, especially if SA weather doesn’t improve. I’m still supportive to friendly both old and new corn.

Soybeans – Soybeans had a great overnight session and fell off during the day. January beans settled down a half-penny at $11.83 ¾. The close was 11 ¼ cents off the high and 2 off the low of the day. The bean market has now tried to take out the $12 level and failed…on the overnight session each time…four times now! A quadruple top anyone? Do I think we take $12 out? Yeah, I kinda feel like it’s going to happen, but at the same time, it’s apparent we’re going to need some help to do so. IF we could see export sales on the morning wire start to show up again as well as weather issues in South America continuing to persist, I can’t help but see new highs in our future. Now, if we straighten out in SA and the Chinese realize there will be plenty of beans available on the world market, maybe this high was it…but I suppose for now my guess is that’s not the case. Producers need to have their risk quantified moving forward, regardless of whether they’re bullish or bearish. I like having beans sold with calls in place to participate in the upside. If you need help with something like that, be sure and reach out.

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Matt Bennett

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