There was much consternation to be had over a wild cattle market during the Agweek Market Wrap on Friday, Dec. 8.

Volatility gripped that market during the week, while the World Agriculture Supply and Demand Estimate released earlier in the day didn’t have much to offer, according to Randy Martinson of Martinson Ag Risk Management and Randy Koenen of the Red River Farm Network.

“The volatility was unbelievable,” Martinson said of the cattle market. He noted changes of $3-5 up and down throughout the days of the week.

But there wasn’t much reason for the ups and downs other than money movement.

“You kind of wonder when the bleeding is going to stop,” Martinson said.

He expects continued sloppiness in this market until the Cattle on Feed report in January.

Since October 2023,

feeder cattle prices

have dropped from nearly $270 to $215 per hundredweight in the first week of December.

“The one saving grace is we did have some strength to finish out this week,” Martinson said. Cattle will finish out the week higher, that’s been unusual recently. Eleven out of the last 13 weeks showed losses in the feeder cattle market.

Some factors at play is that packers have cut out their Saturday kills, supplies are increasing and the consumer demand has decreased, according to Martinson.

Koenen described

the supply and demand report

as “kind of a yawner.” Martinson agreed that it shared what was expected. The only surprise he noted was an increase in soft red wheat exports to China. The report overall was friendly to wheat and corn.

Martinson said the volatility witnessed in grains was the result of profit taking more than anything else.

“We’ve got demand in the U.S. that’s returned, we’ve got some weather issues, but is it justified that we’re seeing the wheat markets trade 15 cents high to low every day and beans trade 20-25 cents?” Martinson said. “You know the volatility continues to be quite strong.”

Even so, at the end of the week the range has been relatively unchanged.

Weather has been friendly to the grains as South America is still struggling with a lack of rain. It’s continuing to leave farmers there wondering what they will be able to plant and when. That all depends on how much longer rain holds out.

“It’s been the typical, like we see in a drought year, it’s always two weeks away,” Koenen said.

CONAB lowered crop projections more than anticipated this week. Martinson said producers have their inputs ready, but they are waiting to see when the soybean harvest takes place.

“If it’s late, they’re not going to plant the crop, so we really aren’t going to know much on the safrinha corn crop until January or February,” Martinson said. The safrinha (little harvest) is the second crop of corn planted right after soybean harvest.

Koenen wondered how Amazon shipping has changed with the drought. Martinson said it’s been hampered and shipments are about three months out at this point. In areas of South America where it is raining, they are slowed because they cannot load out grain in the rain given their infrastructure.

Some of that slow down could have contributed to China deciding to cancel 10 cargo loads of corn out of South America. It appears they’ve switched to the U.S. instead in an effort to get the product more quickly.

Looking ahead, Martinson said eyes should be on crude oil, the dollar and weather in Brazil. Crude oil took a hit recently, dropping below $70 a barrel. Expectations are that it may make an increase soon.

(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.