(WCIA) — The corn market went up 25 cents and soybeans went up 50 cents yesterday following the United State Department of Agriculture’s release of grain stocks and supply-demand reports.
“Its going to set the tone for the whole year, and quite frankly it is setting us up for a really good 2021,” says Matt Bennett, a farmer, commodity broker, and popular grain market speaker.
He says he was quite pleased with Tuesday’s USDA report that cut the supply of corn.
“You know, if you’d told me on Monday, Stu, that we’d see a 1.55 carryout on corn and a 140 carryout on soybeans, which is what the USDA gave us, I would have said we’d be lucky to say we’d close higher on Tuesday,” says Bennett, “and the reason is that those were about where your average trade guesses were.
“But you look at corn, and the quarterly stocks number for December first was 600 million bushels below what the trade was estimating and so what you got is you don’t have as much corn around the country, and what did they do, they dropped the yield.
“Why did the trade get so excited? Because they also dropped demand. And most of us in my part of the world know demand shouldn’t have dropped today, though. I think what the USDA is saying is, prices are having to go high enough we are having to curb demand.
“High prices will cure high prices, but bottom line is, every originator in the world, everybody that is paying attention to basis knows corn has been hard to get ahold of. And it sure looks to me that it’s going to continue to be hard to get ahold of.”
Bennett says soybean prices are good for both the old and new crop.
“Very few of us have any old crop beans left if we’re going to be honest about it, and I’m one of them, you know, we had a wonderful year in 2020, selling at much lower prices than what we currently see,” he says. “But we really got to be cautious moving forward, Stu, to take a look at $14 beans on the front month, and you look at $11.70 beans on your November ’21, let’s not think that’s a bad thing to sell at $11.70 beans because most of use didn’t sell a whole lot of beans at $11.70 this year if we are going to be totally honest about it.”