Market Monitor

By Marlin Clark

In the dark, with guesses

The market is poised for action on Monday as this is written. USDA reports that can move the market are anticipated, but we are all in the dark at this moment.

Monday, after the close and after this is written, USDA will release the weekly report on harvest progress. Then, before the market opens again, we will see the USDA November Crop Production Report. These reports can be negative to prices, or positive, or even work against each other. Interesting times, and I get to make some guesses here because we have a day and a half to go to some answers.

Prices trended sharply lower last week as traders seemed to believe there was good harvest progress being made for a change. It remains to be seen if that is true, but we were sure coming from a long way back. Last week USDA told us we were all the way up to 25 percent harvested on corn! We should be rounding third and on the way home!

Even while the market was expecting big gains, the weather was spotty. Around NE Ohio, the combines were rumbling, and so were the complaints about how wet the corn was. The complaints about the yields were not so universal. There have been pleasant surprises. Those with high-test weight varieties have also had some good yields. One large farm operation in Trumbull County is reporting 200 bpa corn. That is not as good as the record yields of last year, but it is notable in a year of cool temperatures and worries about that effect on the crop.

We still have beans standing in some areas. Where the beans were being chased, the corn is not catching up. So, the USDA numbers will be interesting, then they will be dissected, then they will be disagreed with.

Remember, the perspective of the last big reports was for a record soybean crop and corn crop second in history. Along with the 13 billion-bushel corn crop was a usage slightly higher than that. The usage was supposed to blunt the size of the crop.

Last week corn prices declined the last three days on the Chicago Board of Trade. It is only in the Monday morning electronic trade before the pit opening that we have seen an upturn. December futures put in the recent high on October 23^rd at 4.13-1/2, then declined 54 cents in a few days. The futures then bounced 39 cents by the 4^th. We closed the week at 3.66, but are now trading 3.72.

With the November soybean futures now into the delivery process in Chicago, we are looking at January beans. The perceived catch-up in the harvest caused steep declines last week. We nearly matched the recent high on the 4^th, at 10.22-1/2. (We were 10.29 ten days earlier.) Three rough days on the market as the combines ran got January futures to a Friday close of 9.55, down 67 cents in three days. Overnight we have got that back to 9.62.

I expect the market to be shocked by corn harvest numbers that are still in the 50 percent range. This would be part of the explanation for the bounce overnight. However, improving weather will mean the delayed harvest has just about run its course in the attempt to push prices higher. The rain later in the week came out of the forecast this morning. A good week puts the crop in the bin and the reality of the huge crops back in the spotlight.

 

 

 

 

 

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.