Good Morning!
I hope you’re having a great week. With the recent rain, thoughts of farming in March are fading a bit. We’ll take the rain for sure, especially with how dry we were over the last 6 months. As we get closer to spring planting, I know many of you are locking in your crop insurance decisions and possibly considering acreage decisions, especially with the energy/fertilizer ramp-up due to the conflict in Iran. It’s an exciting time of year as we hope and pray for a better year than we’ve seen over the last three. On our operation, we will be corn to beans and vice-versa with no plans for an acreage adjustment. While not all of our N needs are applied, we’ve locked them all in with no more fertilizer to be applied as we got it on last fall. Keep me posted about how you’re viewing this spring and stay in touch. For more information on AgMarket, click here. https://hubs.li/Q03qt2Qd0
The markets were up strong on the overnight market Sunday night as the war situation in Iran hadn’t cooled a bit. With oil surging initially but backing off significantly, we saw our markets perform in a similar fashion. Beans made back Monday’s losses on Tuesday while corn stayed in the red. While President Trump has indicated the war is close to over, the markets seem unconvinced as these situations aren’t sorted out too quickly. Outside markets should have provided a negative bias as crude continued to retreat:
Corn – The corn market started the week racing up to $4.76 before backing off on Monday. On Tuesday, May corn closed 1 ½ lower at $4.52 ¼. This was 1 ¾ off the high and 6 ¾ off the low. Corn export inspections were above expectations at 1.518 mmt. This was lower than a week ago but we continue to churn out big shipments. While corn is well off of the weekly highs at this point, we’ve seen renewed interest from the funds in owning these ag commodities. The USDA report on Tuesday was essentially a nothing burger with no changes to the US balance sheet. While the USDA raised world production slightly, the report didn’t give us much new information at all. I’d keep those offers current on old-crop as I know basis continues to widen as these markets rally. There is still a ton of old corn to chew through, so this may take some time. Dec26 corn settled 2 lower at $4.79 ¾.
Soybeans – Soybeans also raced higher on Sunday night, betting up to $12.33 ¾ before backing off. On Tuesday, May beans were up 5 ½ at $12.01 ¾. This was 5 ¾ off the high and 24 off the low. May soybean meal was up 1 at 314.5, while soy oil was down .48 at 65.62. The weekly inspections showed bean shipments at 879 kmt, which was above expectations but well under the numbers posted a week ago. For beans, the report was similar in that the ending stocks were the same with minor revisions to the balance sheet. The same logic applies for beans to some degree as we see with regards to corn. It’s tough for me to ignore these rallies. I’d continue to reward in increments on old crop and on new, if you can call it a profit, it makes sense to continue hedging off some risk. IF and when this war subsides, I’ve got to think we’ll potentially lose a good bit of what we’ve gained. On Tuesday, Nov26 beans closed 5 ¼ higher at $11.53 ½.
Matt Bennett
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