3/17/2023

Story of the week has been the concern of bank failure, Silicone Valley Bank being the first one to collapse. (pro-tip: use more than one banking institution to keep your cash balance lower than the FDIC max insurable amount of $250,000) The Fed is stepping in to settle the storm but I’m guessing there will be un-intended consequences.

This unrest in the financial markets is bleeding over into the commodities. One example is energy. The nearby May WTI Crude contract lost $9.85. (daily chart below) 

Even with this extreme bearish action in energy we finally got an up week in the corn market. May futures gained 17¢ for the week. Biggest driver has been flash sales to China, see chart below. Funds also added about an estimated 10,000 contract of length. 

It will be interesting to see how this plays out in old crop corn. 10 days ago we were thinking that there was adequate supply of corn and basis seemed softer in many areas. Exports were lagging USDA expectations but now we may be making some of that ground up.

Our recommendation is to get this old crop priced and sold. Evaluate the upside potential and versus the downside risk and execute accordingly.

New crop corn and wheat also had gains for the week and made up some of the losses that were put in starting in mid-February.  Recommendations here are to have a balance approach to your marketing, know you cost of production, and have a plan in place that will help you seize opportunities when they arise.

For any help developing a plan give Colby or Colt a call.

New crop wheat chart.

New crop corn chart

Farmers Coop’s Grain Team is available for helping develop marketing plans for producers. Call the Hemingford Grain line at 308-487-3325 to discuss current markets and strategies.