[ad_1]
Supply and demand news and a ramping up harvest are pushing the markets in mid-September.
Randy Martinson of Martinson Ag Risk Management and Randy Koenen of the Red River Farm Network discussed the week of ups and downs during the Agweek Market Wrap on Friday, Sept. 15, 2023.
Martinson described the markets as having a bit of a USDA report hangover.
The report slashed wheat supply and increased corn production despite poor conditions.
Koenen said that there are variable yield reports coming in, not unlike the weather patterns seen this season. Martinson agreed and added that rain is finally creeping into the forecast at a time when harvest needs to be taking place.
“Right now I think timing is everything with soybeans,” Martinson said. If the U.S. can continue to get the crop in, it will help them stay ahead of Brazil in the export market.
Wheat stocks were cut
in the report, which was friendly to the grain. Corn is plentiful and doesn’t have much news to give it direction. Soybeans, however, saw a cut with an already tight supply.
The current soybean prices are encouraging Brazil to add soybean acres. Martinson said they only plan to expand acres by 4% next season, down from what is expected to be added there. What hurts them is they are not prepared with storage. A lot of their corn is being held and won’t make it to ports before the next soybeans are ready to roll.
Koenen noted that they’ve been talking about a lack of infrastructure in Brazil for decades. It’s a problem that persists, according to Martinson. Outside countries have been investing in their storage, but it’s slow going.
The U.S. is having its own issues trying to get grains to the Gulf of Mexico on the Mississippi River with such low flows. The northern Plains are a bit isolated from that problem because much of the grains head to the Pacific ports by train.
Martinson noted that bean movement by train to the Pacific has taken off. Beans will continue to go to town, while it appears wheat and corn is more likely to be put in the bins for now until demand improves.
The first North Dakota soybean crush plant at Spiritwood is coming on board soon. With these additional plants coming on board there will be a shift from shipping beans, to shipping soy meal. These additional domestic options help fill the gap of a lagging export market, Martinson said.
The livestock market saw some back and forth, yet hit contract highs for live and feeder cattle. Martinson pointed out that domestic demand is solid, while exports are lagging.
“If we continue to see the economy hold like it has, I think we could continue to see a pretty decent market,” Martinson said.
Even though interest rates remain high, people continue to spend money and have a little extra it seems. Martinson noted a visit to Chicago, where every restaurant he visited was packed with people paying for meat on the plate.
“You know 70% of red meat has to go through restaurants and our restaurants are busy,” Martinson said.
It’s a tight livestock market and Martinson said that the herd is not rebuilding. It seems it will be a couple more years of rebuilding is needed to bring up the supply.
Looking ahead, Martinson said eyes will be on the high crude oil prices, which are going to be felt heavily by producers hitting the fields and hauling goods. The dollar also continues to creep higher, which is harming the ability to sell on the export market.
(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.
[ad_2]
Source link