Weekly Market Recap and Tom's Take Dec. 31, 2020

Happy New Year 2021 Revised vf

2020: In like a lamb, out like a lion?

Yesterday brought more fireworks to the Board of Trade and continued overnight. March corn futures recorded their 13th higher close, and appear to be headed for a 14th today. January soybean futures broke through $13 yesterday to close at $13.03 3/4. They closed above $12 for the first time on December 17th, so in 8 trading days, they’ve added over one dollar. Beans in the teens, indeed. 

For corn, a big bullish input was the announcement of Argentina suspending corn exports due to the ongoing dry weather. While this is being thought of as more of a theoretical threat to world wide supplies, it does show how concerned that government is about the potential for drastic cuts to their corn production. 

The strike in Argentina ended late Tuesday and there are scattered reports that crushers were back up and running yesterday. However, that 20 days of non-production there eliminated about 3 weeks of soybean meal production that will be almost impossible to get back. 

Opening calls:

Corn 2 to 5 higher 

Beans 10 to 15 higher 

Tom’s Take:

As we wind down the year 2020, with the myriad issues faced by everyone, I thought I’d like to say how much I have enjoyed sharing my thoughts with all of you. Marketing grain has never been “easy” and 2020 is definitely one for the record books. Starting with low soybean exports due to issues with China, and into Spring with ethanol production declines, it did not promise to be a good year for high prices. As we end the year, U.S. supplies are in high demand both domestically and internationally. Many of you still have Old Crop to price. My hope is that you will do that wisely. Think about the calendar as you complete your sales for the 2020 crop. The March 31 prospective plantings report should be a major report this year and could signal the end of this rally. As we move into planting time, prices may start to work lower if we have the same kind of rapid progress we saw in April, 2020. This inverse on both soybeans and corn needs to be respected. The bottom will fall out at some point; don’t be the one standing when the music stops in this version of musical chairs. Keep in mind you still have New Crop to price as well. I typically advise people to be done marketing Old Crop before they plant New Crop, but this year may be an exception. If it is, I would not want any unsold Old Crop by July 4th.

So, as the final page turns on this year’s calendar, let me leave with this: 2021 appears to be starting on the right note in a lot of ways. I expect prices for all commodities to be lower, perhaps much lower, 12 months from now. Enjoy the ride, even when it gets bumpy. I recently talked about one of my favorite songs, and here is another line that I’d like to quote from it: “the times I thought were the end of the world, didn’t turn out so bad after all.” That is kind of how 2020 has felt for many/most of us. My wish for 2021 is nothing but the best for each and every one of you. Best of luck to all of you in everything in the future. Adios