Grains recover as Illinois crop outlooks takes a hit
AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discuss the recovery in the corn, soybeans and wheat market, a disappointing week in cattle and a positive outlook for hogs.
Heat has been a big factor in the market in the past week, Randy Martinson of Martinson Ag Risk Management said on this week's Agweek Market Wrap, sponsored by Gateway Building Systems.
Heat has been a big factor in crop conditions all season, Martinson told AgweekTV's Michelle Rook. The difference now is that the heat is hitting the eastern Corn Belt instead of the western Corn Belt and Northern Plains, where unseasonably warm temperatures have hurt crops all summer.
"Before, it was a footnote," Martinson said. "Now it's a headline."
Illinois is the state to watch in Monday's Crop Progress report, Martinson said. The state's corn and soybeans took a big hit in the Aug. 23 report, and if they take another hit, it'll probably be a boon for the markets.
And then, soon thereafter, Crop Progress reports will lose their prestige.
"The Crop Progress report is going to fade away as we're going to start getting actual yield results," Martinson said.
While heat centered over Illinois, the Dakotas and Minnesota have seen cooler temperatures and precipitation. Martinson said that didn't lead to a big turnaround in crop outlooks but did stop the corn and soybeans from going backwards and may lead to some better pod filling and kernel depth.
Export sales also were positive this week, with a couple corn sales to Colombia indicating that Brazil is out of sellable product.
While the rain helped corn and soybeans, it has put a damper on spring wheat harvest. Meanwhile, winter wheat prices dropped on assumptions of more acres put into the crop this fall.
Martinson said a Stats Canada report due out Monday is something to watch for in the markets.
Cattle this week were a bit disappointing after a positive close last week, Rook said. Martinson said there was some profit taking in the market, and this is also a normal time of year for some drift. Boxed beef was down, which also is expected as most Labor Day demand needs have been met. Where the market will go from here will depend a lot on the strength of the economy, Martinson said. Demand will be hard to predict because of continued concerns about COVID-19.
Martinson said news that China's hog herd could possibly be trimmed 14% was positive for the hog market.
Martinson and Rook also discussed the importance of news coming out of the Federal Reserve Jackson Hole meeting, in which Chairman Jerome Powell said interest rates will not be raised at this time. That was good news for the stock market.