After the U.S. Department of Agriculture's Quarterly Stocks and Small Grains Summary show wheat production at a 19-year low, the market acted accordingly, putting both Minneapolis and Kansas City within striking distance of highs.
But once those highs are in, where could the market end up, AgweekTV's Michelle Rook asked Randy Martinson of Martinson Ag Risk Management.
It could go a dollar above those highs, Martinson said, noting there is not resistance at this point to stop it.
There is one caveat to that, however, that export sales remain light, he said. However, Russia continues to talk about cutting exports, which could bring business to the U.S.
Corn did not have as positive of a Quarterly Stocks and Small Grains Summary, but grain's strength helped pull it along, Martinson said. Plus, corn yields during harvest are coming in less than expected, he said.
Rook asked how the higher stocks numbers in the report jibe with recent reports of positive basis in the Northern Plains at ethanol plants. There obviously isn't enough product to go around if the plants are paying above market-value for corn, she said.
Martinson agreed that something doesn't quite add up there.
"It tells us supplies just are not there," he said.
Another thing to factor in, Rook and Martinson discussed, is the climbing price for fertilizer. Both corn and wheat require a lot of fertilizer, so prices are going to have to be high to get people to plant those crops.
Meanwhile, soybeans had a down week, and the future is a bit more daunting there, Martinson said. The Thursday report showed a lot more stocks than expected, which puts all eyes on where this year's yield ends up.
"Right now we're going to watch where this year's production is going to be coming into play," Martinson said.
China, they said, typically waits until nearly mid October to purchase soybeans, so the low may be a ways off.
But, Rook pointed out, the basis level for soybeans, while not as attractive as for corn, is still much better than usual this time of year. Martinson that is an indication that elevators are looking for soybeans to export and hoping to give farmers an incentive to get them in.
Meanwhile, the cattle market still can't catch a break. A negative Cattle on Feed report was part of the issue. Martinson said slaughter is running ahead of pace and weights have gone up. That, combined with normal seasonal pressure is strong.
One stabilizing factor has been the hog market's strength. That market could keep going on as the recent Hogs and Pigs report showed tightening supplies. But Martinson does not expected that market to go above $100.