New news was hard to come by in awakening the markets as the year 2023 came to a close, according to Randy Martinson of Martinson Ag Risk Management and Randy Koenen of the Red River Farm Network.

The two discussed, during the Agweek Market Wrap, how the markets began to quiet prior to Christmas and remained that way through the end of the year, on Friday, Dec. 29.

Old news was still at hand including the

conflict between Russia and Ukraine;

poor weather conditions in South America; and improved

export sales for the United States.

Koenen said amongst the negative news, a bright spot in everything has been a boost in corn export demand.

“Exports have been really good,” Martinson said. He shared that the increases may continue into the new year depending on what happens with Brazil’s weather.

“Everybody is waiting to see what this weather does this weekend. We could get rather volatile Tuesday morning,” Koenen said, related to the weather system that could hit Brazil over the weekend.

Martinson agreed and added that there’s considerable dry conditions in Brazil and abandonment of soybeans is popping up in these dry areas.

“Which could support our demand in the U.S.,” Martinson said.

One thing helping the U.S. is the lower dollar. Further discussion coming from the Federal Reserve is that they will be lowering interest rates in the spring.

The economy will have its impact on the markets as the Dow hit some high points in December.

“That certainly is helping to encourage the stability as far as the economy is concerned. I think it’s also pulling some funds out of the commodities and bringing them over to the stock market because of the good returns they are seeing,” Martinson said.

Koenen asked if that money could be coming back to commodities in a reversal. Martinson said if the stock markets falter, it could bring it back to the commodities.

Martinson said where we could see value coming back into the commodities is through

renewable diesel and biofuels expansion.

Related to that, with more biofuel production, comes more soy meal. Taking advantage of that means more exports or building the livestock industry to use that product.

The latest Cattle on Feed and Hogs and Pigs reports were a bit negative to the livestock markets according to Martinson. Cold storage was a bit friendly, though.

Martinson said cattle seem to be trying to climb out of the hole they dug themselves into earlier this fall.

“I think the next big thing is the Cattle Inventory report in January. That certainly will, I think, help to drive that market,” Martinson said.

An ice storm that struck portions of North Dakota,

as well as snow storms in South Dakota and Nebraska in the last week, could have an impact on the cattle with some reduced weights expected to come to slaughter.

Koenen took a look back and noted that grain markets are all about $2 a bushel less than we were at a year ago.

“You know good production, better than expected yields especially in wheat and corn and little bit of slow down in demand, I think we’re probably lucky that it’s only $2,” Martinson said.

Looking ahead, Martinson said eyes will be on South America weather, the dollar and a crude oil market that may be gaining some support.

(The Agweek Market Wrap is sponsored by Gateway Building Systems.)

Michael Johnson is the news editor for Agweek. He lives in rural Deer Creek, Minn., where he is starting to homestead with his two children and wife.
You can reach Michael at mjohnson@agweek.com or 218-640-2312.