It was a quiet end of the marketing week, largely thanks to a Thursday holiday that set some traders home for Friday as well.
On top of that, more benign weather conditions take some pressure off the market for the time. That’s according to Randy Martinson, president of Martinson Ag Risk Management. He discussed the main events of the week with Randy Koenen of the Red River Farm Network on Friday, June 20.
As the northern Plains are largely planted, it's all about growing now. And that’s going much better with heat returning to the forecast.
“And the heat we got, boy, the crop sure jumped out of the ground this week,” Koenen said.
Martinson agreed and was hopeful for more growing degree days to come.
The previously cooler weather held crops back. Martinson expects that about half of the corn will reach knee high by the Fourth of July, while the other half may not quite get there.
The markets saw trade fall into a back-and-forth action this week. Some concern going into the weekend involves the ongoing and intensifying war between Israel and Iran. On top of that, Russia continues to wage an offensive against Ukraine.
Martinson saw some positives in continued strong demand for exports of U.S. grains.
“The reasoning why July is coming under pressure isn’t following through is because we’re not seeing competition that much in the export side. We’re still seeing good exports and good shipments.”
Martinson said traders are likely looking at non-threatening weather and steady exports. It appears that corn stocks are going to be short despite what could be a large incoming harvest.
Martinson and Koenen both commented on the potential for tighter winter wheat supplies. Koenen heard from custom harvesters that are seeing struggles with excess moisture in the fields.
“They are worried that about a third of that winter wheat in Kansas, it's going to go, quality is going to drop, and it's not going to make milling and that also is going to be an issue going forward,” Martinson said.
He sees this as part of what’s causing a wheat rally. A descalation of war could take some pressure off the wheat.
Livestock
The cattle market has seen some volatile weeks with big losses followed by recovery. While beef prices remain fairly high, the consumer pushback at the grocery store does not seem to be significant. What is showing up is more demand for pork, which may indicate some consumer movement away from beef.
Concerning pork, some profit taking caused losses to end the week. Talk of potentially positive deal-making with China has returned some confidence to the market, which may see a peak during the Fourth of July holiday.
Upcoming reports that could wake up the markets include Monday’s crop progress report, and then the market should position itself ahead of the planted acreage report.
Martinson’s gut feeling is fewer corn and wheat acres and likely more soybean acres will be estimated.
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)