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Another volatile week in the markets is 'one for the record books' as news continues to drive prices

Volatility continues in the markets, with headline news leading the way, Randy Martinson of Martinson Ag Risk Management and Randy Koenen of Red River Farm Network discussed on the Agweek Market Wrap. They talk war news, export sales, Mississippi River levels, drought, cattle herd reduction and more on this week's episode.

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This week was "one for the record books," with war premium over missiles hitting Poland going in and out of the market, Randy Martinson said on the Agweek Market Wrap. However, almost any news is leading to volatility in the market right now, he said.

"We're kind of going into the winter doldrums," he said. "We're finding it harder and harder to get news."

Randy Koenen of the Red River Farm Network agreed: "It's getting tougher and tougher to find anything that's really fresh that could move this market."

Martinson said the war premium served as a reminder of how starved and volatile the market is and that anything can move it.

The Thursday export sales report showed solid sales for corn, good sales for corn and continued struggles for wheat, Koenen said. Corn and soybeans, Martinson pointed out, had market year highs for exports. The strength in export sales could prevent USDA from lowering exports in the December reports, he said. He thinks the wheat market could open up after the first of the year.

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The Mississippi River could be seeing some relief from low levels with rain in the forecast, and Martinson said that could allow normal loads to head down the river, which would open up more trade routes. That could help move some northern corn to southern feedlots, as well.

Movement of fertilizer has been less of an issue than expected, Koenen said, because so many farmers got fertilizer put on in the fall. He and Martinson said that was unexpected in the spring, when planting lagged because of cold, wet conditions.

Drought continues to be a concern, and Martinson said that is something the market will have to deal with. With significant growing regions in the U.S. "still in dire straits," stocks are likely to remain tight and some crops are going to need to buy acres.

Koenen said markets have been "range-bound and choppy," and Martinson expects that it'll stay that way for now. South American conditions — good in Brazil and still a little dry and troubling in Argentina — could have lead to good producing potential, but that doesn't seem to be breaking any markets out of their trading patterns.

The USDA's Cattle on Feed report due out Friday afternoon is expected to be friendly. Martinson said placements have been heavy, though northern calves still need to make it to feedlots. Supplies continue to be tight, but more cull cows continue to go to the market. That means the breeding herd continues to get reduced, which could mean friendly market conditions for cattle for years to come.

With the early snow, Martinson said feed demand will be up.

"I think we'll see a little bit of movement of the background cattle sooner than normal," he said.

Martinson said he continues to be surprised at the overall volatility in the markets.

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"It's headline news that's driving the market right now," he said.

Producers should consider doing some marketing when prices are at the high end of their range but should be patient when the prices drift back lower, he said.

The Agweek Market Wrap will take a break for Thanksgiving next week. Have a great holiday!

(The Agweek Market Wrap is sponsored by Gateway Building Systems.)

Jenny Schlecht is the director of ag content for Agweek and serves as editor of Agweek, Sugarbeet Grower and BeanGrower. She lives on a farm and ranch near Medina, North Dakota, with her husband and two daughters. You can reach her at jschlecht@agweek.com or 701-595-0425.
What to read next
The back-and-forth in the market this week on news coming out of Ukraine and Russia is a good example on just how jumpy traders are and how sensitive the market is to any sort of disruption in the grains. Stocks of grains around the world are tight and any issue that could result in the disruption of production will result in the grains to rally.