Market Plus with Mark Gold

Paul Yeager: Welcome back in. This is the Friday, March 22, 2024 Installment Market plus. Mark Gold and I feel like we just hit pause and wound. Wait a minute. I find myself up like a top in the middle in that break. Or did I wind you up?

Mark Gold: No, I think we both wound each other up here.

Paul Yeager: Well, we have a lot of questions. People are wound up. They have questions for you. A lot of them on corn. If you want the livestock commentary, go back to the end and maybe we'll talk just a tiny bit about that. But let's start with Joe in Wisconsin. He leads off our questions. Does corn soybeans have a better chance of having a big surprise at the end of the month? Reports?

Mark Gold: Well, I think maybe the beans do. We've crushed an awful lot of beans. I mean, 20 million this last month over the previous high. And, you know, now we're talking maybe 50 million bushels being cut from the carry outs because of the crush. So I think that's positive out there that maybe the stocks number will be a little bit friendly on the beans.

Mark Gold: I think the corn number is going to be high, I think on the acreage numbers. Ninety-one million, I think is way too low on the, on the corn as a 92 is a 92 and a half. I think that's probably the range. Are they going to come from the soybean acres? I think some of that will. But I also think that the soybeans might lose acres to cotton as well. Got good cotton prices out there. So I think, you know, with that being said, if I was going to look for a surprise, I would look for a friendly surprise in the soybean market.

Paul Yeager: Let's go back to crush. This is one of the things I was wound up about in the intermission. That's a lot to crush.

Mark Gold: Yes.

Paul Yeager: Then what? Where's it go?

Mark Gold: Oh, then you got the mule and you got the oil. And you got to find some place to get rid of it.

Paul Yeager: And who's, who's interested in those products?

Mark Gold: Well, you know, certainly biodiesel is going to be interested in it, and I think we'll see more of that as far as the meal goes. You know, we're still a solid user. We can export the meal. And I think over time, you know, we'll see some of those numbers come up. You know, is a little bit tougher, I think, than the oil. Palm oil had a big break during the week, made new highs and broke. That pushed our bean oil down. But I think overall, the market will do its job at the right price and we'll move those products in.

Paul Yeager: The meal is an option and that is something we didn't have. We have more capacity coming on. That was part of the banks report that they issued Thursday that was of interest. Let's, let's keep going because this question has a couple of layers to it. Stephen in Virginia, which he always has layers to his question. Stephen, thank you. Why does everyone fear a year when corn and beans are twice the price of ‘22?

Mark Gold: Well, because we can go back 30, you know, that would be the fear. You know, if we have another monster crop of corn and beans, we have great weather this year. You know, last year it wasn't great weather until it was. And as I've always said, these genetics, today they wait and you hear these horror stories, Oh, my God, the beans and corn look terrible. In May and June and then the first week of July. Oh, it's going to be a disaster. And then you get two inches of rain and you got a crop. So, you know, certainly if we grow another big crop, that's going to be an issue. Where are we going to go with all that? If there is any production glitches out here, we still have a lot of corn to get through. But if I'm right and the carry out on beans is going closer to to 65 or to 70, you know, that's a number that is sensitive to any production losses. So, you know, ultimately, I think that, you know, the beans have a better chance. But, you know, let's see where the Sarafina crop winds up in Brazil and the Argentinian crop winds up.

Paul Yeager: I think I had this question in mind when I asked it to you during the show about what could happen given Friday's close. Roger in Indiana asks you, what are the odds that the gap in May beans gets filled? And I and I my question was I had the gap in my mind because Friday's movement really kind of gave, I would think, some some indigestion.

Mark Gold: Well, it's we were hired overnight down hard overnight. We didn't start that way. It kind of drifted that way. And then we got really slammed. I still believe that there's a bean story out there. And, you know, like I said in the show, we broke $0.20 off a buck. We needed a correction and we'll get the market healthy again. I don't think there's anything really significant. And again, I see a couple of potentially friendly things out there in the Bean market, so I'm not overly concerned about it. You know, this market's had an incredible ability to look great on a close, making new highs for that leg of the move or crossing over the moving averages and then, bang, going back the other way. It's looked terrible at the bottom, only to come back the next day. So, you know, one day down doesn't bother me too much. We'll see what happens on Monday.

Paul Yeager: You're going to like Matt's question there in Iowa because that ties in exactly with what it looks like has disappeared recently. Matt in Iowa wants to know why is corn so sideways lately? Are the 20 to 50 cent swings coming back anytime soon?

Mark Gold: Sure. They're going to come back, as they always do. You know, you look at the closes over the last eight sessions and they're pretty stagnant and we haven't really done much out here. That generally doesn't hold too long. Now, is the report going to be bullish enough to take us to another level? I hope so. But I think we certainly put the bottoms in and here funds are still heavily short. Margins went up on corn on Friday. So that's going to be another little interesting thing, maybe to force some of the funds out of their positions. So, you know, overall, I think the corn market, you know, it's got some upside to it, but we need to really close over. I want to see the May contract close over 446. That would give us an impetus to, I believe, move higher.

Paul Yeager: So you have optimism. You don't see this as our only good time to market in this year. Happening right now.

Mark Gold: Because right now I don't believe cash prices, when you look at the futures price minus the basis, is all that profitable. And I've always said on this show in other places, you get at least one opportunity every year to market your crops at profitable levels. And I don't think this is that level. And I think something will happen during the summer. We'll get another 40% bump, maybe get new crop well up toward five bucks, maybe 510. And that may be your marketing opportunity to at least put in a decent floor at much cheaper prices than you can today. So I don't think we've seen our one profitable level quite yet. And I'm hoping that sometime in the summer we'll see that and that's when you want to get ahead of the marketing, particularly if the American farmer is still holding on to that old crop looking for a $6 corn. Again. And he doesn't take advantage of that rally... good luck.

Paul Yeager: I swear we did not write what we're about to ask, but this is Mark right here, because the next question. Mitch in Iowa wants to know. Given the current carry out, what bullish fundamental story can you sell us on for corn right now? Because you've said it time and time again people are holding on to this crop.

Mark Gold: You know, if you guys want the bullish scenario, go out there and sell the old grab corn, Get it out of your hands into the merchandizers hands where it needs to be, Then you'll have a bull market. Until that happens, you got to be looking to sell the rallies.

Paul Yeager: Okay. The email is going to come. The response to that comment, if I tweet, it will say, You're just in with the Merchandizer right now and you're making money and that's why you're telling us to do it.

Mark Gold: Anybody who knows me or seen me on these shows for the last 20 some odd years knows I'm not a big fan of a lot of the commercials out here. So, no, I'm certainly not in their pocket by any stretch of the imagination. I just know how markets operate over time, and I've seen it too often.

Paul Yeager: And I want to go back to something you said, too. You said movements of sense. I'm not hearing movements of dollars on beans. Or do you have dollar moves and do you have more than just 40 to 50 cent moves in corn coming this year in your head?

Mark Gold: You know, in my head, if the farmer doesn't sell at 40 to 50. I think in my opinion it'll be about it. If we can get all crop corn anywhere towards 490 ish, we're going to be selling more corn. We don't have a lot to sell, but there's still some left. I think that, you know, in the bean market, we just had a dollar rally. Can we get another dollar rally on top of this? Sure, why not? I think, you know, the corn is son's and the beans are dollars. And hopefully it will be to the upside and all the funds are going to come out of these positions at some point. Technically, we've done some very positive things up until the day in the bean chart. The corn, the wheat almost actually had a pretty good close here today over the moving averages outside of day. So that's positive. But, you know, the funds have had a lot more money than I've got. And, you know, they've held in here a lot longer than I think they should have. You know, they have parsed some of the positions in the corn, but we'll see where they go from here.

Paul Yeager: Okay. We are. Let's just be conservative in, say, 2 to 3 weeks away before somebody starts planting. Take away the snow. Now, give me some parameters that I should operate on before I go into the field and start planting. What actions do I need to take in beans and corn to help protect myself moving in to mid-April?

Mark Gold: Well, we recommended Thursday that you've got to take a look at some of the short dated December corn options in November put put options out there and those short dated options, you know, they're not cheap by any stretch of the imagination, but they're not all that expensive. You can spend 10 to $0.15 on corn. You can spend 15 to $0.20 on beans, maybe a little bit more to put in some level of support between now and July. And I think that makes a lot of sense considering all the reports, the spring planning weather, the initial summer weather, and at least, okay, if I'm dead wrong and corn go straight up from here and you lose the dime and you pick up another $0.50, are you going to be mad at me? I hope not. That's part of the risk management game. But in the meantime, if things don't go our way and everything looks pretty good, you're going to be real glad you got that first layer of protection on that. So I would do that. I would do that before the report.

Paul Yeager :How can we get mad at you?

Mark Gold: To me.

Paul Yeager: Your phone must ring on occasion. Yeah. Okay. Marc Gold, everybody, appreciate your time. Good to see you, Mark.

Mark Gold: Nice to be here.

Paul Yeager: All right, that will do it here for Market Plus. Next week, we are going to talk about those major government reports and set the course for 2024 in the green belt, at least in the eyes of the USDA. We'll have a panel discussion. Don Rose, Sean O'Leary and Jeff French, thank you so much for joining us and have a great week.

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