Welcome Back

Well, as much as I hate to say this, I have (obviously) been inactive on here for roughly the last 6 months. I have been crazy busy with life and the markets have for the most part been grinding lower, so I took my feet off the gas for a little bit. Now that planting and weather season is in front of us, I have reengaged.

Throughout this crop year, I am thinking that I will publish monthly “Market Masters” that include a full breakdown of the supply and demand, price outlooks, and hedge outlooks. The Market Master series will allow me to save some time from spending hours every week writing to a more consolidated timeline that should work better with my schedule. Look for the first one of these to come out in the coming weeks!

In the meantime, let’s take a little bit of time to think about corn for the 2024/25 marketing year. The USDA is estimating that we will plant 90M acres of corn this summer. If we see a yield in the range of 175 bushels as a national average or higher we are likely to see another year of a 2B plus carryout. I am currently looking at about a 2.4B bushel carryout on my first look balance sheet (will publish soon).

The implications of this are multiple. It likely means that December 2024 corn has some additional downside potential and could see lows in the range of $4.00/bu or slightly less. It also means that basis could get ugly for the first time in a few years. Corn basis throughout the countryside has been able to stay fairly firm because producers put most of last years crop in their empty bins. That corn sitting in bins today will need to be marketed at harvest to make space for the new crop. That is bearish basis and something most people haven’t really seen since 2019.

Talk to you soon,