Wheat ends lower and corn and
soybeans hold on as markets come to a close on Friday, May 9.
Bringing down wheat this week was improving conditions of the U.S. crop, sluggish exports, and better weather and production expected for Russia and the Black Sea region, according to Randy Martinson, president of Martinson Ag Risk Management. He discussed the highs and lows of the market with Randy Koenen of the Red River Farm Network during the Agweek Market Wrap on Friday.
Traders seem to be paying more attention to planting progress this week, according to Koenen. And that planting progress is looking strong as dry and warm conditions are expected to help the planting progress push ahead of the five-year average for the upper Midwest states.
A trade deal with the United Kingdom didn't bring much to the table of agriculture this week. It’s possible an announcement could be made this weekend for some kind of trade deal with China.
“That certainly is going to be something that's watched a lot more by the trade,” Martinson said. “It’s going to be a headline. I mean, that’s what the market is going to move off of right now.”
Martinson shared that President Trump has gone from not moving tariffs off of China to potentially softening the tariffs down to 45-50%, but that depends on how the meeting goes. A trade deal would make things run more smoothly, Martinson said.
It could be interesting how the USDA estimates trade on Monday, considering the tariffs are now in place. Couple that with some unexpected flash sales of corn to Mexico and soybeans to Pakistan, and it’s hard to say how grain stocks may be estimated in the World Agricultural Supply and Demand Estimates report.
Koenen and Martinson both shared how a trade agreement with India could make a big difference in trade numbers. An agreement could mean more ethanol sales to India, which translates to more corn sales.
“So we have some positive news on the corn front. It’s just that corn has been struggling to actually react to any positive news because of the good planting progress,” Martinson said.
While progress is good, high temperatures and high winds expected in the northern Plains this weekend could be an early test to seeds that are in the ground.
Record cattle
With August and September contracts for feeder cattle hitting $300, cattle prices continue to surprise the market.
“When does this end? That’s what everyone is wondering,” Martinson said.
Tight supply and continued demand keep these prices high.
Martinson said at some point, this market will drop and drop severely. He encourages producers to continue to keep hedges in place and protect their supply.
Pork demand has been good domestically, but struggling with less demand from China. Martinson expects the U.S. consumer will, at some point, start leaning on more inexpensive cuts of meat from pork and cut back on beef.
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)