Randy Martinson of Martinson Ag Risk Management and Randy Koenen of the Red River Farm Network discussed the back-and-forth ways of the agriculture markets as they came to a close on Friday, Nov. 3.
While there is plenty going on in the world, there was little having a profound impact this week on market numbers. Even so, there was plenty to keep an eye on.
Soybeans above $13 a bushel was a good sign, but even better were rumors that China is looking to buy more grain. Martinson shared about a U.S. delegation currently in Beijing that could translate to improved trade with China.
“That will help if we can start getting some business coming our direction,” Martinson said.
It’s a good sign to see since, generally more attention shifts to South America grains as winter drags on, according to Koenen.
Helping the U.S. situation are more reports coming out of South America that flooding is hurting the current planting of soybeans. It’s a hit to their hopes of another planting and may indicate a shift to another grain in its place. An expansion of corn acres may not make sense economically.
“That makes them (South American farmers) a little more willing to cut back on the acres and then willing to cut back on some of the expenses that are going to go into it,” Martinson said.
Koenen pointed out that markets tend to firm up as harvest comes to a close. But he noted that that has not happened yet.
Martinson said that what has been seen from the harvest is that the corn crop has been a bit better than expected. This could keep corn prices “sloppy” for a bit as a lot is on the way to town.
As those crops come in off the field, rain and snow has been an issue. That moisture has equated to somewhat higher river levels, including the important trade routes of the Mississippi River. Most of the shipped grains are soybeans, right now, putting corn and wheat on a back burner,” Martinson said.
More moisture and cold are making for unpleasant harvest conditions for many producers. That’s bringing some strength to the markets right now, according to Martinson.
“We’re seeing harvest activity, but it’s not looking pretty,” Martinson said. He recalled seeing some four-wheel drive tractors working to pull grain trucks out of the fields.
Koenen mentioned that the next potentially important report to come is the USDA’s World Agricultural Supply and Demand Estimates. That’s to be released on Thursday, Nov. 9.
Martinson said expectations are a lower yield estimate, much like there was in October. He does not believe they will lower export estimates.
The USDA will also release on Tuesday, Nov. 7, updated baseline projections. It’s a hint at what the Ag Outlook Forum usually provides.
Other things at play this week include the Federal Reserve’s move to hold off on interest rate increases. Job numbers came in a bit lower than expected.
Cattle stall
Supplies continue to be tight in the cattle market, yet supply of frozen meats continues to be stronger. Cattle markets favored the upside, yet bounced about throughout the week.
Martinson said it appears the market is stalling out.
“Now we just need to see the consumer come back to the grocery store and start buying beef again,” Martinson said.
Looking ahead, Martinson keeps his eyes on the wheat market and how it is not seeing much support despite war in the Middle East and Ukraine.
Crude oil, also, has seen some pullback at a time when it was expected to see support.
Source: AGWeek
