Grains finish higher, despite quenching rains in South America and southern Plains

Don Wick of Red River Farm Network and Randy Martinson of Martinson Ag Risk Management discuss what's going on in the agriculture market around the world on the Agweek Market Wrap.

Export demands helped markets end on a high note while much needed rain gave a boost to the United States and South America.

The strong finish was welcomed, if not a bit unexpected, on the Friday, Jan. 27 during the Agweek Market Wrap with Don Wick of the Red River Farm Network and Randy Martinson, president of Martinson Ag Risk Management.

Wick pointed out the weather patterns, which brought needed moisture to the southern Plains in the U.S. as well as showers for Argentina.

“This market has been waiting to see rain in the southern Plains for the winter wheat, you know, they got a good snow cover in Kansas,” Martinson said. He also highlighted the much needed rain falling in Argentina and southern Brazil.

The fact that markets ended higher was unexpected.


“A lot of that I think was due to extra export demand that we saw this week,” Martinson said. The business, corn and soybean sales, was going to China, according to Martinson. Though the Chinese were enjoying their New Year holiday, they must have been doing some shopping, too.

Martinson spoke further about Brazil that it appears their big crop is getting bigger.

“For the most part some of the producers I’ve talked to in the last few days say it’s going to be a monster crop,” Martinson said.

The USDA estimates the Brazilian corn crop production is up 8% from last year.

Rains should help boost areas of excessive dryness in Argentina.

Upcoming U.S. crops

February’s crop insurance figures should help establish what’s going to be planted across the U.S., according to Wick. Martinson agreed that this is a key time frame to determine what will be planted on acres in 2023.

And another impact on the U.S. market are indications that interest rates may increase by at least a quarter percent in coming months. Martinson doesn’t expect it to increase much more than that at this time. A big factor in the economy holding its own is that there has not been a big increase in unemployment numbers. U.S. unemployment remains at 3.5% as of December 2022.


War in Ukraine

Escalations in Russian war on Ukraine continue to cause uncertainty despite the fact that crop production is higher than expected in those countries. Martinson said that a concern is that there is uncertainty about how much of the next crop will be planted.

Cattle look for direction

Wick said it appears the cattle market is in a holding pattern as it waits for buyers and sellers to come to the same place.

Martinson said what he saw this week was a lot of feedlots were in tough shape due to weather coming through, whether rain or snow.

“I think that kind of caused the packers to take a step back and let the cash drift a little bit,” Martinson said.

He added that a cattle inventory report next month could show that numbers are tighter than thought.

“I think that might be the main driver that this market is looking forward to,” Martinson said.


What’s ahead?

While the northern Plains remain in the ice box, southern states like Texas will be planting soon. Seeing work start down there and slowly make its way up north will gradually give the market a look of what’s coming.

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

Michael Johnson is the news editor for Agweek. He lives in the city of Verndale, Minn., but is bent on making it as country as he can until he returns once more to the farm living he enjoys. Also living the dream are his two children and wife.
You can reach Michael at or 218-640-2312.
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