It was a huge up week in the grains, AgweekTV's Michelle Rook said to start off this week's Agweek Market Wrap: "You needed your seat belt on for this one."
End users of corn and soybeans were scrambling for products, which led to higher prices and lower basis for producers. Randy Martinson of Martinson Ag Risk Management said he thinks soybean processors and users like ethanol plants will keep going higher to get what they need.
"If they're going to stay in business, they need product, and they're willing to take it as long as they can get something on the backside" for their products, he said.
The next level for corn to test is the 2013 high, which was $7.4875 per bushel, Rook said. Martinson said there's a long way to go to get there. But with demand and the dry situation for Brazil's corn crop, much remains to be seen about where the market will go.
Wheat continues to see some weather premium in the market but also demand from increased wheat used in place of corn in rations.
The drought is playing a part. Martinson said he thinks more producers will plant spring wheat, but with the drought conditions, that doesn't equate to more production.
It was a tough week for cattle, Rook said, and she wondered if the strength in corn was a big part of it. Martinson said that played a role, but other factors, like economy concerns and COVID-19 issues brought more pressure. He still expects to see tighter supplies of meat and strong demand in coming months as temperatures warm up for grilling season.
"I'm a little more optimistic going forward," he said.
In the hog market, Martinson thinks supplies could be tight, but much will depend on demand from China, which is reportedly rebuilding its own herd. Rook pointed out China did buy some U.S. pork this week.
"If they stay in the market, I think we could hold it together," Martinson said.