What is it about Wednesdays that so often we are nearly devoid of fresh market news? After all, this is the day of the week named after the Germanic god, Woden (Wodnesdaeg), who was the top dog in ancient northern European mythology. It should be filled with grand announcements and gestures, not mundane stories about this or that minor tender for barley (no offense to the barley industry). Maybe we insulted Woden by referring to this day as “hump day,” associating him with camels or images of Quasimodo, and as retribution, he has blocked important stories from being released. Okay…that may be a bit far-fetched, and we may never know why we seem to have a lack of information on Wednesday’s but just in case, be wary if you see any one-eyed men with a raven on their shoulder walking around.
For the second day in a row, we have a little corn business to report. 140,000 MT have been sold to unknown destinations. While these quantities would not appear to be enough to stir the heart of a bull, they have not needed much encouragement as of late anyway.
Of course, the true leader of the pack this summer has been the bean market, and we now have moved nearby futures to within fifteen cents of $12 for the first time since the summer of 2016. That year, spot futures peaked at 12.08, and since that time, we had not pushed north of 10.80 until three weeks ago. Other than sitting in a very overbought technical position, there is nothing that we see that would suggest that this market will necessarily run out of steam around $12 again or not. Theoretically, in a semi-free market, the price’s job is to encourage/discourage either production or usage. At this time, only mother nature can do anything about production, so the emphasis is on discouraging usage. One might think that a nearly 50% increase in price during the past eight months has come close to accomplishing just that. That said, the 800-pound gorilla in the room, China, has not announced if that is the case for them, but they have been noticeably absent from the scene as of late.
The key takeaway from all of this should be a warning not to grow complacent and just assume there is no end to it all. The market is doing just what it is supposed to do, and yes, more often than not, we will overshoot the mark in the heat of the moment, but no one will announce precisely when that will be. One place producers should probably pay attention is for 2021 new crop beans. In many areas, you can probably walk $10 beans out of the field, and if you are thinking about increasing acreage next year, as many probably are, that does not sound like a terrible place to get started.