I hope things are going great for you this week. My week has been a blur. With crazy markets, it seems I’ve been on the phone 24/7. If you’ve wanted to call me, don’t fret…it’s what I do and I’d be glad to hear from you. However, how many times do we get so bogged down we don’t take time to relax and get some rest. If you’re like me, I feel a little guilty when I do so. While 2020 was a crazy year with plenty of dysfunction, it seems some of the crazy has been drug into 2021. It’s a little stressful for any and all of us just reading the news, opening our computer or simply trying to talk to people about something other than politics…yikes! Make sure you’re taking care of yourself here at the start of 2021. While markets are much improved and things are looking better, there is still plenty of stress to go around. I hope to hear how things are going for you…but don’t call if you’re taking time off! 😊 firstname.lastname@example.org
The corn market continued its climb after the USDA reports while beans struggled on Tuesday. The interesting thing on the reports is carry-out levels for both corn and beans were very close to the average analyst estimates. Why the huge run-up? Well, on corn we saw December 1st quarterly stocks 600+ mb less corn on hand than the trade anticipated. Given the USDA ‘only’ dropped 2020 corn production by 324 million bushels, it appears the USDA is continuing to account for their overestimation of the 2019 crop…shocker. I’ve said for over a year the USDA jacked 2019 up in a big way…it’s just frustrating we are finding it out now as we could have really benefited from that info a long time ago. The bean report was friendly as well but still similar to expectations, so the bean market doesn’t seem near as fired up. Outside markets were likely a bit negative in their contribution to our ag markets on Wednesday. Feb crude was down 30 cents on the day, closing at $52.91. The Dollar settled .261 higher at 90.325. The DOW ended the day 15 points lower, setting at 30,959.
Corn – The corn market was racing higher on the overnight session as buying continued after the limit-up moved on Tuesday. With some selling creeping in March corn worked higher but settled well off the highs at $5.24 ½, up 7 ¼ cents on the day. This was 17 cents off the high and 2 ¼ off the low of the day. The EIA report from the Department of Energy showed corn usage for ethanol up a bit at just over 95 million bushels on the week. With ethanol stocks up from both last week and last year, some concern was warranted on just how much driving is being accomplished with the continued discussion about the pandemic. While we settled well off the highs, it seems the trade is focused on how the USDA got to the number they printed on Tuesday. With a drop in production of 3.8 bu/acre, production dipped 324 mb, as previously mentioned but total usage was down 250 mb. Usage was thought to go up by most traders, so my guess is the trade is excited about futures having solid footing underneath as we see how this story unfolds. Now that we’re on the other side of the report, a person must know acreage and crop-insurance prices will quickly become the focus. Producers would be missing the point completely if they didn’t at least take some risk off the table. I like where I’m at…65% sold on corn with the corn in the bin seeming to gain value every day. Call us if you’d like an extra hand with your marketing.. 844-424-6758
Soybeans – Soybeans had a great overnight session where gains evaporated and then some on the day session. With a bit of a sell-off, Jan beans closed at $14.11, down 11 cents. The close was 27 ¼ cents off the high and just a half-penny off the low of the day. The bean market didn’t show near the strength we’ve seen in the corn market since the report was released. While bean carry-out is super-tight at 140 mb, that was right at where the average trade guess was, so it’s tough to say it was a real bullish report when comparing to expectations. The thing is, this bean situation is super-tight and stocks/usage at just 3.1% is as tight as we’ve ever seen this time of year. With that being said, we’ve rallied almost $6 since summer-time. It’s tough to tell how high we should go, if we should go higher at all. However, we just saw more export sales of over 400k metric tons to ‘unknown buyers’ on Wednesday. My gut tells me these beans could rally well over $16, but we have to get over $15 first of course. I struggle to be bearish but I am selling…I think we need to be selling and managing risk on beans, and if they move higher, who cares…we’re still making money.
Call us if you want to talk positions or strategy…or simply bend our ear. If you want more information on the markets, be sure to visit my team’s website at https://agmarket.net/
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