Grains fall slightly as war premium, other issues, already are factored in
AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discuss how war and other factors have been factored into grain and livestock markets.
The grains all closed lower this week, as the war premium already is factored in, AgweekTV's Michelle Rook said on this week's Agweek Market Wrap.
Wheat fell the most, which was not surprising as Rook and Randy Martinson of Martinson Ag Risk Management already had discussed wheat's overbought status in past episodes.
Martinson said other factors hurting wheat include news of rain in the southern Plains and high prices keeping demand at bay.
But for both wheat and corn, which also is impacted by the Russia-Ukraine war situation, the prices have stabilized. Martinson said things coming that could affect wheat and corn markets include a resolution to the war and the acreage report coming later this month.
Minneapolis wheat didn't drop as far this week, as it's trying to hold acres, Rook said. Martinson said every crop, and especially those that require more fertilizer, are trying to hold acres in the north. An expected strike by Canadian Pacific Railway employees also could play into fertilizer demand, Rook and Martinson said.
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Though corn was down, it held together better than expected as crude oil "plunged," Rook said. Martinson said that was on account of talks of allowing sales of E15 yearround, which would provide more demand for corn. Plus, demand for corn has been strong, with China back in.
Soybeans also were down, as South American weather concerns are now built into the market. Martinson said factors that could impact that sector coming up include Argentina considering export taxes on soybean oil and soybean meal. Brazil is getting into harvest now, and its beans are cheaper than the U.S. soybeans, but Martinson expects demand to return to the U.S. in late summer as Brazil's supplies are expected to be short. Because soybeans use less fertilizer, he expects acreage in some parts of the country to increase.
Cattle had a good week. Demand and exports have been strong, and Martinson expects the upcoming Cattle on Feed report to be supportive. Warm temperatures have helped increase demand as barbecue season will begin.
"I think the market is finally brushing off some of the economic concerns and some of the outside noise that has been keeping the market a little bit at bay," he said.
Pork had a down week, but Martinson said the strength in cattle should help its recovery. He thinks much of the drop has been due to profit taking.