Good Morning!
I hope the spring is going smooth for you. I know it’s been hit and miss for many with some of these rain events chasing us out of the field. This last week, we missed the rain earlier in the week, so we decided we’d work some ground and ‘set the planter’. Well, conditions were as good as could be, so we planted a few hundred acres. With both planters going, even the first two days we were able to get plenty done. The 80 degree temperatures make me feel a little better about the rain that chased us out of the field as soil temps were in the mid-60s when we got the rain. Over the weekend, the cool temps concern me a bit, but with just a half-inch, my hope is it’s all up in a couple of weeks. The forecast shows a slight chance for us on Tuesday, then a window until Friday. My plan is to put a bunch of beans in the ground on Monday and Tuesday and if no rain, plant corn again Wednesday. We’ll all know what we should have done here in a few weeks I suppose-but for me we’re getting after it when we can Keep me up-to-date as your spring rolls along if you get a chance. mbennett@agmarket.net
The corn and bean markets again rallied on Friday, but corn lost a couple of cents on the week, while beans again posted double-digit losses. With the market feeling heavy all week, buyers finally showed up heading into the weekend. Unrest in the middle-east likely contributed as position evening was a feature with traders not wanting to get caught on the wrong side of a big conflict. Outside markets were again mostly negative. May crude settled up .41 on Friday at 83.14-a loss of 2.52 for the week. The Dollar settled at 105.984-up .152 on the week. The DOW settled at 38,208-down 30 on the week.
CORN – The corn market closed the week with a Friday rally for the second week in a row. May corn settled up 6 ¾ cents on Friday at $4.33 ½. This was half-penny off the high and 6 ¾ off the low. May lost two cents on the week. While the corn market looked as dead as a doornail Monday through Thursday, on Thursday night we heard of Israel launching some sort of attack on Iran, which drove most commodities sharply higher. While crude oil gave up big gains eventually, the corn market was impressive, closing just above the 50-day moving average. With the Argentine crop getting downgraded daily due to disease and talks of lower planted acreage, the Brazil crop hitting on some hotter and drier weather could certainly give us some life. I’m not sure we rally like gang-busters, but the market seems plenty oversold for this time of year. As I’ve said a few times of late, the funds don’t generally take a big short into the growing season. Therefore, it would be normal to see a weather rally or something to get them closer to even. IF we see this, I think having some offers in on old and new corn makes great sense. The fundamentals don’t look too friendly in the long run.
DEMAND – Demand wasn’t all that great on the week with improved exports and lower ethanol grind. This past week the USDA reported sales of 501k tons of old-crop export sales-this was around 175k higher than last week’s number. 65k of new-crop sales were posted for next marketing year, so total sales were over 200k better than a poor number last week. The Department of Energy’s EIA report showed corn grind lower. At just under 98-million bushels, we used around 7 million bushels less corn than the previous week. Stocks were down from last week but up from a year ago. Posted basis levels are quiet. My local basis is 17 under the May-four cents better. In Decatur, basis was 2 over the May-no change. On the river in St. Louis, basis was 22 over the May-4 cents improved.
CASH CORN – Cash corn values were lower for most of the week but rallied into the weekend to finish quite close to last week’s cash bids. For cash corn, we’re seeing some basis push as farmers haven’t been selling much grain of late. Especially in the west some of the basis levels are impressive. As I’ve talked about for some time, getting offers in during spring planting seems like a smart decision as we typically see some strength this time of year. It’s tough for most to move grain while putting a crop in the ground, so given the already stagnant flow of grain, having some offers in above the market makes great sense to me. If a guy wants to keep ownership on paper, I think that’s as good a move as any given how cash corn will act once the dam finally breaks and this corn moves off the farm. Also, it’s cheap to own calls right now, so a person can keep ownership without a ton of investments. Let us know if we can help you put a strategy together.
2024 CORN – December 2024 didn’t get back as much of its losses as the nearby contracts. On Friday, CZ24 closed at $4.66 ¼, down 5 ¾ cents on the week. Dec is back under $4.70 at this point and saw lows under $4.60 just on Friday morning. I still expect some strength in here as it seems there’s little if any weather premium in this market. However, the long-term thoughts on this market are still a bit bearish. Our risk is certainly from here to $4 for those with 85% crop insurance and lower for those with less coverage. So-a rally up closer to $5 will hopefully be met with some risk-management as it would seem logical to me this market will struggle with a normal-sized crop. I still think $4 or lower Dec corn is a decent possibility with a trend-line yield. Therefore, I like locking in a worst-case scenario with flex-I know those that read this consistently are probably tired of hearing that. 😊 As always, I recommend using something like the AgMarket app to keep tabs on profit margins. Keeping tabs on how input prices play into your marketing plan is good risk management. https://www.agmarket.app/app/
BEANS – The bean market lost ground again this past week. To close the week, May beans settled at $11.50 ½, up 16 ¼ cents. This was 2 ½ cents off the high and 18 ¾ cents off the low. May beans lost 23 ½ cents on the week. May bean meal settled at 343.7, down .7 on the week, while May soy oil settled at 44.38, down $1.51. Crush margins are hanging in there-and with record crush for the month of March have been impressive. Lower bean prices are working in those margins’ favor, but we certainly hope both beans and products can rally moving forward. It’s not hard to see why meal and oil are dropping however-given big crush, we have big supplies. As we grow this crush industry, there will certainly be growing pains. The big issue this bean market has to deal with right now and over the next year or so is how many beans continue to be planted. With inputs quite expensive, US growers aren’t the only ones opting for more bean acres. So, on any strength I continue to feel it would be wise to get some of this bean price risk managed. I hate to be bearish, but fundamentals for both the US and World are anything but snug.
DEMAND – Soybean exports were up on the week. We saw net sales of 485k tons, which was up 180k from a week ago. 265k in new-crop sales were posted, so overall sales were up over 400k. Basis was mixed. Local bids for me were posted at 21 under the May-four cents improved. Decatur’s basis was 5 over the May-two cents wider. On the river, basis was 16 over the May-a penny improved.
CASH BEANS – Cash bean values were lower on the week-once again. This cash bean situation continues to erode. Price action hasn’t been good at all and with basis not doing the work, values continue to work lower. I gotta think we get a pop for this bean market sooner or later, but I’m not sure it will be enough for most producers to get excited. I suppose the best move on old beans is to set some offers and be done with them sooner rather than later. I realize many like to hold onto those gambling stocks and I don’t blame you one bit. I don’t know personally if I’d want to hold onto more than that though.
2024 BEANS – November 2024 beans also lost ground on the week. Nov24 closed at $11.61-down 15 ¼ cents on the week. I know I haven’t been too friendly new beans or old as far as that goes. I remain a bit concerned of where prices are going ultimately. I’d say there’s just as much chance we see fall beans for cash under $10 as we see them over $13. I know that’s not likely a popular thing to see, but I’m afraid that possibility is very much intact. With the most stocks we’ve had since 2019, a big yield with big acres this growing season would likely put more pressure on this bean market than we’d care to see. So, as with corn I think it’s wise to have protection under these prices while keeping some flexibility in the event we don’t see a big yield. I can’t think of a better way to approach what is likely to be a volatile summer market.
As always, be sure to figure break-evens when deciding whether you want to make sales. For figuring your break-evens, I recommend using the AgMarket.Net Profitability App https://www.agmarket.app/app/ to help you get a handle on your budgets and to set your marketing plan for 2023 or 2024. I’d be glad to help, so be sure to reach out.
**For the strategies I talk about on here, please remember these are the tools I use for my farm. These are not recommendations but merely a way for the reader to see how I approach marketing for my operation. There are tons of good tools out there. For more information on markets, strategies and ways to set up a solid marketing plan, visit my website at https://agmarket.net
I hope you have a great week. Please let us know if we can help you in any way.
Matt
815-665-0462 – Work
@chief321 – Twitter
mbennett@AgMarket.Net – E-mail
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. AgMarket.Net® is the Farm Division of John Stewart and Associates (JSA) based out of St Joe, MO and all futures and options trades are cleared through ADMIS in Chicago IL. This material has been prepared by an agent of JSA or a third party and is, or is in the nature of, a solicitation. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading information and advice is based on information taken from 3rd party sources that are believed to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. The services provided by JSA may not be available in all jurisdictions. It is possible that the country in which you are a resident prohibits us from opening and maintaining an account for you.
Back