Heavy snow pack may change northern Plains planting and yield expectations
Randy Martinson of Martinson Ag Risk Management and Don Wick of Red River Farm Network talk slow spring, planting expectations, interest rates, banking, Russia and livestock on the Agweek Market Wrap.
Don Wick asked Randy Martinson the question that's been on everybody's mind: "Pushing into late March, early April and still dealing with all this snow, what are you hearing from your customers from the growers in the area, particularly about the start of a late start."
"Everybody's pretty much thinking it's going to be a late start" to planting, Martinson said on the Agweek Market Wrap on March 24, 2023. With two feet of snow or more in places in the region and a forecast for little warm up in sight, Martinson said some farmers already are considering looking for earlier maturing varieties and quesitoning whether they should still plan to plant spring wheat.
The USDA Prospective Plantings report, which contains a look at USDA's acreage estimates for the year, is due out March 31. Martinson said the consensus is there will be more corn and soybeans and less spring wheat, though more winter wheat already has been planted. However, he said there likely will be changes depending on how the spring shapes up.
Wick said the Federal Reserve's announcement of a quarter percent bump in the benchmark interest rate definitely hit the outside markets, and Martinson said meat markets were watching the announcement as well. A quarter percent was expected and considered neutral, but more concerns were raised by Fed Chair Jerome Powell saying more increases would be coming. Issues with the U.S. banking system eased throughout the week, but European banking remains a concern.
The Black Sea grain initiative went through with a 60-day extension rather than the 120-day version Ukraine favored. Wick suggested that shows who is "holding the cards." Martinson said going with 60 days was probably a wise choice to avoid Russian aggression in the Black Sea.
Russia also is considering suspending exports of wheat and sunflowers because of low prices, and Martinson said that could help the U.S. enter the export market. That would help move through wheat supplies and prop up sunflower prices, he said.
On the livestock side, hogs ended a little strong this week, Wick said, but it's been a long down period for the sector. Martinson said hogs have been "bleeding pretty bad," and the herd faces continued reduction but needs to see more demand. Cattle, meanwhile, are nearing the end of the feeder calf run, and prices have held up, Martinson said.
"I think in the big picture, if the economy can hold, our prices will hold as far as cattle are concerned," he said.
Black swans could happen, but he expects supplies to continue tightening and prices to reflect that.
Martinson said weather issues and the acreage report will be the market movers in the coming week.
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)