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Commodities end week 'on a bang' on lower US dollar, high demand and news out of Ukraine

Commodity markets ended the week 'on a bang,' Don Wick said on the Agweek Market Wrap. Randy Martinson of Martinson Ag Risk Management said a combination of factors came into play, including Russian President Vladimir Putin indicating he would not support extending the deal to allow exports out of Ukraine, a sharply lower U.S. dollar, and the expectation that the USDA's export reporting system will be back up next week and will show strong smaller sales.

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Commodity markets ended the week 'on a bang,' Don Wick said on the Agweek Market Wrap.

"What was behind the strength as we wrapped up this past week?" he asked Randy Martinson of Martinson Ag Risk Management.

Martinson said a combination of factors came into play, including Russian President Vladimir Putin indicating he would not support extending the deal to allow exports out of Ukraine, a sharply lower U.S. dollar, and the expectation that the USDA's export reporting system will be back up next week and will show strong smaller sales.

The USDA next week will release the September World Agricultural Supply and Demand Estimates, and Martinson expects the agency will lower corn yield about 3 bushels; the actual yield likely will end up even lower, but he said USDA will move slowly. He also think corn harvested acres estimate will decrease about 500,000 acres, that soybean yields will be unchanged and that soybean acreage might increase a little.

The report likely will be a non-event for wheat because the USDA Small Grains Summary is due out later this month and will have more information.

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Dry weather in the southern Plains likely is impacting winter wheat planting, which Martinson said has helped raise wheat prices as the market is trying to buy some acres. USDA programs also are encouraging of winter wheat planting, and he expects a "pretty good increase" in acres.

However, what amount of the planted acreage will survive the dry conditions "we won't know until spring," he said.

Harvest continues on for small grains with good yields in some places and disappointing ones in others, and Martinson said overall, it sounds like small grains will be average or less than average on the year. Hot, dry conditions have pushed other crops, and corn chopping and some bean harvest is underway. Wick said dry edible beans so far have had very good harvest results.

The USDA's July export numbers showed over $1 billion in beef exports for the month, Wick said. Martinson said countries with emerging affluence are looking for higher quality protein.

"We've got some of the best beef around," he said.

July also was the largest cows slaughter month in history as ranchers continue to cull cows in the dry south. That means beef supplies are going to continue to be tight, which is helping the market, especially in the back months.

Agweek, the Red River Farm Network and Martinson Ag Risk Management all will be at Big Iron Farm Show next week, Sept. 13-15. Martinson will be on tap as one of several market analysts to speak at the annual farm show in West Fargo, North Dakota.

The Agweek Market Wrap is sponsored by Gateway Building Systems.

Jenny Schlecht is the editor of Agweek and Sugarbeet Grower Magazine. 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.
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