A positive reaction to a bearish World Agricultural Supply and Demand Estimates report, released Friday morning, had AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management asking, are the lows in for corn and soybeans?
And the answer on the Agweek Market Wrap, sponsored by Gateway Building Systems, was, maybe.
Both corn and soybeans saw stock increases, with both acreage and yield increase for corn and slight yield increase for soybeans. But Martinson said the acreage increase for corn and the yield increases largely were in states that have been plague by drought, like North Dakota, Minnesota and South Dakota.
He believes harvest reports will show that the corn crop is "not all there." And in walking soybeans, he's noticed "the pods aren't there." And that means the yield numbers in the September WASDE might be as high as they get for the year.
The market generally reacted positively to the report, having already built in some of the news prior to the report. Plus, soybean demand has been pretty good, which adds to the positivity, as does a strong meal market, Rook said.
Wheat was not overly affected by the USDA's WASDE but instead took a hit from a Stats Canada report showing dramatically higher stocks than anticipated.
"That really stunned the market and started the ball rolling that we just couldn't stop," Martinson said.
Plus, Farm Service Agency accidentally released some acreage reports showing higher anticipated wheat acres for next season, which also stung, Rook said.
Meanwhile, "livestock didn't have a good week in general," Rook said.
Technical selling pressure hit the cattle market, though Martinson pointed out, not for the first time, that fundamentals remain friendly. That includes cattle numbers, slaughter weights, demand and cash prices.
However, as Rook pointed out, feeder cattle were down even on days when corn was up, a rarity.
"Feeder cattle had a horrible week," Martinson said.
Lean hogs, though, were even worse, Rook said. Some of that was fund liquidation, some was a seasonal reaction to higher hog numbers, and cash prices under pressure, Martinson said.
Exports haven't been bad, they said, with Rook pointing out even China made a recent purchase. But any dip to demand could mean a big dip in hog prices.