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Market Commentary for 3/10/23
Watching the corn market slide the last three weeks has been painful for producers. However, it feels a little too early for the corn market to pull back this much this fast. It seems possible the corn market could turn around like beans did in the fall.
Last September when beans were trading around $13.80, the trade was suggesting the US bean export program may be in trouble due to low water levels and a slow export pace. Many market participants thought that beans would trade in a $13.50 to $14.50 range going forward because of concerns over Brazil’s large upcoming bean crop that could potentially make meeting USDA export estimates at the time more difficult.
Two months later, Brazil was still on track to raise a record crop, and despite dry conditions in Argentina, it was still likely South America’s production would hit a new record. Many still expected the US export pace to slow by February but beans were then trading in a $14 to $15 range. After a historic drought plagued Argentina, and US exports still running strong in March the bean market has been trading above $15 in 29 out of the last 31 trading sessions.
The corn market has had a slow export pace so far, similar to what beans experienced last fall. However, like beans, corn exports could pick up quickly and exceed current estimates too. This last week export sales were more than double that of the previous week.
It is also important to keep in mind, March is not a month when weather issues have a big impact on world corn production. Argentina’s crop is near the end of the growing season. Brazil’s second crop is mostly planted with at least another month before pollination starts. Plus, the US does not start planting the bulk of the crop until mid-April with pollination in July.
Bottomline
Increased corn exports would certainly help corn values to rebound, and last week’s sales increase was a good start. Hopefully that will continue. But in the end, weather will be a big unknown that moves the market the most in either direction.
Want to read more by Jon Scheve? Check out recent articles:
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Jon Scheve
Superior Feed Ingredients, LLC
