Good week in the markets leading up to Good Friday

The grains and cattle markets saw good pressure and some high selling as markets closed before a long Easter weekend, explained Randy Martinson of Martinson Ag Risk Management, during the Agweek Market Wrap on Friday, April 7, with Randy Koenen of the Red River Farm Network.

While markets saw strength, brightening the day most was the northern Plains weather outlook, which finally showed an escape from winter weather. The melt is on.

Koenen mentioned that while North Dakota and Minnesota have a long way to go to get rid of snow, his weather outlook showed about 10 open days of drying weather for the Corn Belt. It was a very welcome sign as farmers make plans for getting into the fields.

“We’re not only seeing a little bit of change in the weather, but we’re also seeing some profit taking and a little bit of positioning ahead of the long weekend,” Martinson said.

Martinson added that the southern Plains should be getting some rain that will help the winter wheat crop. The Delta and Corn Belt are going to dry out, which will allow some planters to hit the fields.

The northern Plains are a long ways from getting into the field, but at least the melt is starting to happen and the long range weather looks to favor plenty of melting days ahead.

“Once we start the melt, it likely will still be a month, that still takes us into the first week of May, 10th of May before we can get into the fields,” Martinson said.

Koenen brought up that a WASDE report will be released on Tuesday, April 11. Martinson said it should be friendly for corn and soybeans, as there appears to be less stock of corn and soybeans than expected. The upcoming May report gives a first look at USDA’s potential for 2023.

Koenen said while attention shifts to the U.S., South American numbers will still pull some weight in markets. Martinson said attention remains on South America as USDA may again change their outlook on production. Argentina likely did not improve its outlook on soybean production despite recent rains.

Koenen mentioned that a Thursday, April 6, export sales report showed cancellations for wheat. Martinson said that’s a concern as wheat has already been struggling with exports. He believes that’s what took the Chicago reports down.

Some cancellations in soybeans were also reported, but were not as big of a concern as it appears Brazil will run into some hiccups, bringing China back to the U.S. for soybean needs.

Koenen mentioned that the U.S. has the upper hand in storage of grains. Martinson agreed that South America does not have storage, so they are forced to dump the grains as they come in.

Koenen considered the most exciting market to be the livestock market. Martinson agreed that live cattle likely broke 2014 highs. Feeder cattle did not break records but still made strong steps forward. Martinson said it comes down to tight supplies that are finally starting to hit the markets.

“It’s going to continue to tighten up as we go forward,” Martinson said. He feels the drought impact in many southern and mountain regions will continue to lower the cow herds.

While beef is booming, pork continues to be devastated.

Pork may be the one thing keeping beef from shooting even higher in the grocery store.

“When the consumer can go into the grocery store and buy pork chops for $1.99 they are not going to buy hamburger for $6.99,” Martinson said.

With the grilling season right around the corner, all meat markets should see improvements in demand.

“Everybody has got pent up frustration, when they want to get out and start that grill because of this winter,” Martinson said.

Overall Martinson said the markets are starting to take a closer look at U.S. production and improving weather conditions here. There is much to look forward to.

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