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How are grain markets looking as 2022 nears an end?

A grain marketing outlook was a highlight from the Northern Ag Expo. Emily Beal talks to Randy Martinson and Frayne Olson about surprises in the grain markets in 2022 and possible risks in 2023.

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A grain marketing outlook was a highlight from the Northern Ag Expo. Emily Beal talks to Randy Martinson and Frayne Olson about surprises in the grain markets in 2022 and possible risks in 2023.

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WELCOME BACK TO OUR SHOW, COMING TO YOU THIS WEEK FROM THE NORTHERN AG EXPO IN FARGO, NORTH DAKOTA.

One of the main seminars at the expo was the Grain Marketing Outlook. I currently have two panelists here with me, Randy Martinson and Frayne Olsen. So guys, as we wrap up 20, 22, what were some of the surprises we saw in the grain markets?

Frayne Olson: Well, I guess to start with, when we started the spring, we were really concerned about planted acreage as well as yield potential, not only here and especially in the northern plains, but also across a pretty big part of the growing, growing region in the U.S. And obviously, the crop turned out to be a lot better than we anticipated.

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Harvest went a lot smoother than I think anybody expected, especially here in the Northern Plains. And so when we look at total production numbers, they came in in kind of an average sized crop. We were right at trend line yield for corn and soybeans, a little bit below for for wheat, but again, primarily because of the winter wheat area. But we had a good production year. And the question now, of course, is where do we go on the demand side?

Randy Martinson: Yeah, I would agree with that. I mean, we were surprised that we were able to even harvest the crop and be done by the end of October with corn, especially with this late planting that we had. And it was a good crop for the most part in most of the areas. Now, we did see that, of course, the Western Corn Belt did have some production issues with the drought that kind of continued to ravage down in that area. But for the most part, you know, it was a lot better end to a year than what we were expecting.

Emily: As we look back in the year of 2022, what were some of the driving forces that really impacted the grain markets?

Frayne: A lot of it revolved around the political aspects, things outside of agriculture, rather than necessarily what was going on within agriculture.

Randy: The slowdown in China demand as well. But, you know, because of COVID not importing as much soybeans or corn, I think added a little bit to that trouble with the U.S. market. And that's we're kind of seeing that yet with our slower corn exports than we anticipated.

Emily: So as we're sitting in the last month of 2022, how are the grain markets currently looking?

Randy: Pretty decent shape. I would say that we probably have hit the holiday doldrums a little sooner than normal. We probably are going to see a quiet December. One thing is that we do know the market is going to be very reactive to any kind of special news or some event that happens, you know l like that missile strike in Poland. We saw that shot the markets up right away. So I think that's something that the market is very sensitive because of our tight stocks.

Emily: So as we head into 2023, what are some of those possible risks that producers could face?

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Randy: You know, I think on the corn side, you know, it's our exports. You know, right now, our export market, however, our exports haven't been good in corn. We're running about 50% of what we were last year at this time. So I think that's going to be the biggest pitfall for corn going forward, is that it's likely USDA is going to lower our export estimates, which will increase our stocks, which that could be a little bit of a black cloud over the head of of corn going forward. And then, you know, with whether South America's production is going to fall, that will help dictate where our exports do come into play. But right now, we're trailing and we've got a it's going to be a long road to hoe to get back to normal.

Frayne: Yeah. On soybeans, kind of a similar story. We're relying very heavily, obviously, on the Chinese market to pull off a lot of the US soybeans are the most dominant buyer. The soybean buying habits right now from China are really kind of a wait and see. They are buying from the U.S. I think we'll continue to have some export sales of soybeans into the US from the US into China. However, they're really buying hand-to-mouth. They're really only filling what they need, anticipating a very large crop coming out of Brazil. And of course, once that crop starts harvest and they're able to get some of those new crop beans into the export terminals and into the facilities, I think we're going to see US export sales to China drop off very dramatically. So farmers from the soybean standpoint, have a pretty tight window to try and get the rest of their old crop marketing done, potentially get some new new crop marketing done as well into the 2023 season. So I'll be watching soybeans pretty carefully for some opportunities.

Thank you too, so much for your insight. Randy Martinson and Frayne Olson.

Related Topics: AGRICULTUREMARKETSCROPS
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