Editor's note: Catch Randy Martinson and AgweekTV's Michelle Rook every Friday after markets close on the Agweek Market Wrap at agweek.com.

The star of the market for the third week of October was hands down Minneapolis wheat. But the other wheat exchanges held with Minneapolis. Worldwide tight supplies of milling quality wheat helped to give Minneapolis support throughout the season.

Wheat production has not only seen a reduction in the U.S., but also other major exporting countries are also seeing production concerns, like the European Union, Russia and Argentina. The tight world supplies of milling quality wheat have not only sent the U.S. wheat markets higher, but it has also helped push Paris milling wheat to new contract highs. Both Minneapolis and Kansas City wheat have seen consistent new crop highs set this past week as the trade tries to ration supply.

Corn came in a close second to wheat, posting solid gains for the third week of October. Some of the strength in corn spilled over from the higher wheat exchanges but support also came from a stellar ethanol production report. The ethanol production estimate for the week ending Oct. 15 came in at 1.096 million barrels per day, the third highest weekly grind on record. The week ending Oct. 22 was even higher, at 1.106 million barrels. Ethanol plant margins are strong, and that is helping to keep corn demand strong.

News of harvest issues in China are adding to the support as heavy rain and flooding concerns has resulted in poor quality corn, which will likely lead to China needing to import more corn to meet demand needs. To add to the push, on Oct. 21, Mexico bought 130,000 metric tons of U.S. corn. South America is making good progress getting corn planted. As of Oct. 21, Argentina’s planning progress was estimated at 32% versus 30% average. Brazil was estimating planting progress on Oct. 22 at 64% versus 57% average.

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Soybeans were laggard of the commodities. Although soybeans put in some stronger sessions, heavy selling pressure late in the week trimmed the weekly gains. Soybean oil was the main supporting factor for the soybean market. Worldwide tight supplies of vegetable oil continued to help support the Malaysian palm oil market, sending it to all time contract highs. This spilled over to give all vegetable oil products strength, including canola and soybeans. Gains were kept in check by reports of good planting progress in Brazil as well as from favorable weather forecasts for Brazil. The 2022 crop year has started off close to ideal for Brazil. As of Oct. 22, Brazil was reporting soybean planting progress at 36% versus 27% average. There were a few export sales reported, as China bought 199,000 metric tons and Mexico bought 126,000 metric tons.

The grains have gained ground since the release of the October Crop Production report, and most are sitting in an overbought market condition. An overbought condition occurs when a market rallies fast and the moving average increase rapidly. It is a signal that too many buyers have entered the market and pushed the market too fast. If the rally is to continue, and to entice new buyers into the market, the market will have to decline to give new buyers an opportunity to enter the market as everybody wants to buy at lower prices.

IHS Markit, the group formerly known as Informa, released their latest acreage estimates and it came as a surprise to many traders. The estimate for 2022 all wheat acreage came in at 48.8 million versus 46.7 million last year. Winter wheat acreage is estimated at 34.2 million versus 33.6 million last year. Other spring wheat acreage is estimated at 12.7 million versus 11.4 million last year and durum acreage is estimated at 1.95 million versus 1.65 million last year. Corn acreage is estimated at 92.4 million versus 93.3 million last year. Soybean acreage is estimated at 87.4 million versus 87.2 million last year. As one can see, they are not expecting corn acreage to decline rapidly, or soybean acres increase dramatically.

The last week of October had Minneapolis and Kansas City wheat trading to another set of new contract highs while the rest of the grains traded with solid gains. Tight supplies of milling quality wheat and strong demand for vegetable oil continues to be the main drivers. Weather forecasts have added a little support to the grains as rain delays are expected in the Corn Belt this week while dry conditions are expected to move into the Southern Plains next week. The Northern Plains also saw rain on Oct. 24, which will keep combines out of the fields for the short term.

The Monday afternoon Crop Progress report is starting to get thin as we approach the end of the growing season. In the Oct. 25 report, corn harvest was estimated at 66% complete versus 53% average. This was 1% above expectations. Soybean harvest was estimated at 73% complete versus 70% average. This was 3% below the over trade estimate. Sorghum harvest is 71% completed versus 60% average. Sugar beet harvest is 64% harvested versus 74% average. As of Sunday, Minnesota sugar beet producers were 15% behind average and North Dakota producers were 17% behind average.

Winter wheat planting was estimated at 80% complete, equal to the five-year average, but 1% lower than expected by the trade. Emergence was at 55% versus 59% average. Oct. 25 was the first look at the winter wheat crop rating. The average trade estimate was looking for the crop to be rated at 54% good/excellent, but instead it came in at 46% good/excellent, 8% lower than expected by the trade.

Pasture and range conditions dropped 1% to now be rated at 24% good/excellent. Topsoil moisture conditions continued to improve. Last week’s rating improved 2% to 65% surplus to adequate. Subsoil moisture conditions also improved 1% to 56% surplus to adequate.

The grains are starting to look a little toppy as most are sitting in an oversold market condition. A slight set back at this time might be in order to clean the market up and encourage more buyers to enter the market. With the inverted market it would make sense to sell wheat right now, but only if the elevator hasn’t already rolled from December to March.

The Minneapolis market has some room to the upside. The December contract broke above the $10 level faster than expected and has traded to highs not seen since July 2012. The next resistance level sits at $10.35 (the July 2012 high), and the December contract has already traded above that level this week but has yet to close above it. A close above $10.35 opens the December contract to test the June 2011 high of $11.20.

Corn and soybean basis levels continue to remain extremely attractive. This is a signal of strong demand and tight supplies, even though we are at harvest (light farmer selling).

The third week of October was a rough week for the cattle markets. Cash bids cannot seem to get off the $124 number no matter what. Demand continues to be strong, especially export demand, but domestic demand concerns continue to plague the market. USDA’s Oct. 22 Cattle on Feed report might be the ticket though to help give cattle a little kick start. The October Cattle on Feed report was bullish, as it showed fewer cattle in the feedlots than expected, solid marketing as feedlots remain more than current, and sharply lower placements than expected. This will hopefully help fan the flames to get cattle to push higher.

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