Things ended quietly on Friday despite significant movement during the week in the agriculture markets. With the incoming holiday season, it’s not an uncommon trend for things to start to calm down this time of year, according to Randy Koenen of the Red River Farm Network and Randy Martinson of Martinson Ag Risk Management. The two went over the main actions in the market during the Agweek Market Wrap on Friday, Dec. 15.

“This week has been full of a lot of different things with a lot of exports coming into play for soybeans not so much for corn and wheat, kind of putting some pressure on them,” Martinson said.

One repeating theme now for months is the promise of rain in Brazil that is still not coming to fruition. Pressure could come to the markets if Brazil finally gets its rain, as that would mean they will get the crop in the ground that they hope to. At this point, rain is staying in the six to 10 day forecast and doesn’t get any closer.

Koenen wondered what that meant for South American exports. Martinson said the dryness is impacting Brazil’s ability to move product at the ports. That’s friendly to the U.S. as other countries, such as China, are coming to the U.S. when they need timely shipments.

“Right now, that is going to be our window of opportunity,” Martinson said.

Weather in the northern Plains, however, remains strangely warm and calm. This means shipping by rail has been smooth so far as snow events have been nearly non-existent.

“It’s been a fairly good year as far as shipments,” Martinson said.

Continued dryness is not helping to boost water levels in the Mississippi, however, the Pacific Northwest remains open for shipping.

“We’re moving up to the top of the food change, you might say, in the exports,” Martinson said. Koenen echoed that saying that with others unable to deliver, the U.S. is the only option for some.

Other impacts to the market this week include a drop in the U.S. dollar. That led to the U.S. being a little more competitive. Martinson said that Federal Reserve Chairman Jerome Powell’s comments on Wednesday suggesting interest rate cuts led to the Dow shooting higher and noticeable sales in commodities.

Martinson said it appears livestock are finally starting to see some light with more positive movements.

“We’ve been back and forth but we’ve been seeing more strength,” Martinson said.

This comes at a time where more consumers are moving to pick up a Christmas ham or turkey, rather than beef. That trend will continue until the New Year, where more people may come back to burgers, steak and prime rib.

Not helping is a significant increase in imports from Canada and Mexico.

A USDA production report was neutral to the market as it showed an increase in production, but an increase in demand offset that.

What is being seen is more tonnage, heavier weights of cattle coming in, as there has been a slow down in slaughter, Martinson said.

A huge amount of imports from Canada and Mexico is also in play.

Economy plays a role in just how much the consumer turns to the higher priced beef. Martinson said the talk of decreased interest rates was a significant boost to the markets, bringing needed stability. Koenen added that a decreased price at the fuel pump is another boost to consumers.

“Crude took a big drop, it traded down below 70 bucks (a barrel),” Martinson said.

Speaking of fuel, news from the

Treasury department on sustainable aviation fuel on Friday

should help the demand side of the biofuel market.

“You know, you look at what the aviation fuel demand is, I mean that’s just monstrous,” Martinson said.

Looking ahead, Martinson said he’ll continue to watch the U.S. dollar, the stock market and the weather in South America as that will impact the the direction of U.S. commodities.

(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.