Matt Bennett’s Mid Week Comments

Good Morning!

I hope things have gone well for you this week. My week has been a blur. With virtual presentations, I’m able to be at home, but it seems I have a few every week this winter. Being a holiday-shortened week, it’s nice to only have markets four days…not to mention I need to take my bride somewhere this weekend. Our anniversary is Feb 6th, her birthday is the 17th and of course Valentine’s Day…I get hit hard in February! While getting away from home hasn’t been all that easy over the past year, we’re making it a point to go do something this weekend. Of course, that’s around 4H steer weigh-in and getting together with family to celebrate Tif’s birthday. I hate to complain about being too busy, but I could use a day or two in here. Let me know how you’re doing…hopefully great!

The corn and bean markets were lower on the overnight markets…the day session saw two-sided trade with the close for both markets fairly quiet. With talk of South American weather still less-than-ideal, selling subsided as the day session wore on. With volatility getting pared back a bit, trade was quiet…much quieter than we’ve seen in some time. The baseline numbers from the USDA are out today and tomorrow, which are assumed to be robust on acreage and carry-out levels. While this typically isn’t a market mover, my assumption is we’ll head on higher if acreage and production is below average trade guesses due to how tight carry levels are already. Outside markets should have been a mixed influence on Wednesday. March crude was up $1.09 on the day, closing at $61.14. The DOW also closed up 91 points at 31,549. The Dollar however, settled sharply higher, up .446 at 90.949.

Corn – The corn market has had a good week with solid gains on Tuesday and the ability to hold steady on Wednesday. March corn closed down three-quarters of a penny at $5.53. This was a penny and three-quarters off the high and 5 ½ off the low of the day. There was no EIA report from the Department of Energy yet due to the holiday pushing everything back a day. Most assume this next week we could see some pullback in corn usage numbers due to the number of plants that had to shut down due to natural gas shortages or simply stopping production to sell the energy they had purchased for a big profit. I look for the baseline numbers to show corn acreage above 90 million acres with the average trade guess closer to 93 ma. Anything close to 90 would likely be considered quite friendly even though most in the trade will still assume big corn acres this spring. With Dec corn settling at $4.60, the average for the month of February remains at $4.52…that price is certainly fine by me for an average. I’m not necessarily bearish old and/or new corn but have a tough time ignoring these prices. It seems to me it would be a great idea to get some profitability locked in at these levels.

Soybeans – Soybeans had a quiet day as well on Wednesday after nice gains were posted to start the week. March beans ended the day down a penny at $13.83 ¾. The close was 6 ¼ cents off the high and 7 ½ off the low of the day. While the bean market has had some huge ranges lately, it was quiet as can be after double-digit gains on Tuesday. Many in the trade assume the high is in for beans without some sort of weather problem for the US, but at the same time, I struggle to agree with that just yet. Given how tight US stocks are, a case can be made for all-time highs based on purely fundamentals and historical price action. For the baseline numbers to be bearish, I’d assume acreage will have to be close to or above 90 million acres with big production. Again, my thought is this might be traded for a bit, but nothing like the reaction we have seen for the monthly reports. On new-crop Nov21 beans, we settled at $11.89…the average for February is up to $11.68. As with corn, I struggle to sit on my hands with new bean prices at these levels. While I’m already at 30%, my plan all along has been to make another sale in the $12 range, which is where my offer is currently…tough to pass up. Let me know if we can help you on a marketing plan…we need to make the most of 2021.

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Matt Bennett

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