Grains keep going higher, and users keep doling out more money for supply, Randy Martinson of Martinson Ag Risk Management and AgweekTV's Michelle Rook discussed on this week's Agweek Market Wrap.
Soybeans were the leader in the grains, with a lot of strength coming from the hot vegetable oils market. Rook speculated that higher new crop prices might be a continuing effort for soybeans to gain some acres, but it's probably too late for that. Martinson agreed, citing quick planting progress.
"The way it looks, we're going to have the entire U.S. crop planted by the time we get to the third week of May," he said.
Soybeans aren't the only crop making strong moves; canola sold for $1,000 per metric ton this week, Martinson said.
Corn, even at prices higher than seen in years, still is seeing strong demand. China bought more than 1 million metric tons of new crop corn, and an unknown destination made a sizeable purchase of old and new crop.
"It's amazing that we still have interest at these prices," Martinson said.
The corn price has been strong on dry conditions in Brazil as well as in the western Corn Belt and Northern Plains of the U.S. That's starting to put the pinch on end users, including ethanol plants, exporters and livestock producers. Martinson said there's "not a lot of margin left in the corn."
In livestock, feeder cattle prices continue to struggle, largely on the basis of the corn price, Martinson said. Demand for meat is strong, as are boxed beef prices, but the packers have all the leverage, in part due to low capacity and slowed chain speeds in slaughter facilities, Rook said. Adding in the high corn price just makes it harder.
"Packers have a pretty good margin going," Martinson said. "I think it's time to start sharing it."
"Well, you're not the only one," Rook said. "There's a lot of producers that feel that way as well."
Hog prices, meanwhile, remain strong along with pork prices. Part of that, Martinson said, may be concerns about future demand due to disease issues and barns not filling up because the high corn prices make it hard to pencil out profit for feeders.
Wheat had a good week, particularly Minneapolis wheat, which topped $8, Martinson said. Dry conditions in western North Dakota are behind that, as reports abound of poor emergence and killing from dryness. However, it's a production problem, not a demand problem, as worldwide supplies are not as tight as supplies of other crops.