ADVERTISEMENT

ADVERTISEMENT

Liquidation, weather and stock market improvement make for a volatile week in the markets

Many markets ended up mixed to lower this week, Carah Hart of the Red River Farm Network said on this week's Agweek Market Wrap. Randy Martinson of Martinson Ag Risk Management said a few factors, including massive fund liquidation, weather conditions and pressures from an improved stock market all played a part.

We are part of The Trust Project.

Many markets ended up mixed to lower this week, Carah Hart of the Red River Farm Network said on this week's Agweek Market Wrap. Randy Martinson of Martinson Ag Risk Management said a few factors, including massive fund liquidation, weather conditions and pressures from an improved stock market all played a part.

On the fund liquidation side, Martinson said it was somewhat of a seasonal pullback that happens during the transition from planting to growing season. Warm weather has been mostly beneficial to crop conditions, other than in the hot, dry Corn Belt, and improved stock market conditions likely led to some people pulling money out of commodities and putting them back in the stock market.

While concerns for the economy still loom large, especially in the way of inflation and energy costs, Martinson sid there was some unwinding of that, including energy costs coming down. It's not yet impacting the grain markets, but it is a good sign, he said.

Traders are looking toward the Quarterly Stocks and Planted Acreage reports, which USDA will release Thursday, June 30 at 11 a.m. Martinson is expecting lower wheat acres — particularly for spring wheat — and corn acres and higher soybean and sunflower acres. That means oil crops may continue to see depressed prices as they've already started to get "beat up" due to increase exports of palm oil out of India, he said.

On the specialty crop front, Martinson thinks barley, durum and dry edible beans will see decreased acreage because of wet planting conditions.

ADVERTISEMENT

The June 30 Acreage Report will be the first picture of how many acres might be in prevented planting. Martinson expects to see 1.5 million to 2 million acres in the program, with 25% of North Dakota, northern Minnesota and northern South Dakota going unplanted. However, he said it could take months to get a clear picture of the number.

Hart said there was good incentive to plant late, including late favorable conditions and strong prices. Martinson said that is true, because earlier in the planting season he thought 40% of the region could go unplanted.

The Quarterly Stocks numbers also could be interesting because indications are of tight stocks for soybeans and corn. That includes bull spreading and strong basis prices for both crops, which indicates there aren't a lot of supplies around.

In terms of crop progress, Martinson thinks the northern Plains crops will continue to hold steady while Corn Belt conditions could continue to go backward.

The Cattle on Feed report, released Friday, was "somewhat what we were expecting," Martinson said. There are a lot of cattle in feedlots, while placements and marketing were both down. The report should help the market, and an improving economy will, too, he said. Domestic demand has remained soft, but decreasing energy prices could help. A Hogs and Pigs report coming out soon could show some expansion for the segment of the industry.

The Agweek Market Wrap is sponsored by Gateway Building Systems.

Jenny Schlecht is the director of ag content for Agweek and serves as editor of Agweek, Sugarbeet Grower and BeanGrower. She lives on a farm and ranch near Medina, North Dakota, with her husband and two daughters. You can reach her at jschlecht@agweek.com or 701-595-0425.
What to read next
Renewable Fuel Standard announcements, railroad negotiations, Chinese lockdowns and war in Russia and Ukraine were big factors in this week's grain markets, Don Wick of Red River Farm Network and Randy Martinson of Martinson Ag Risk Management said on the Agweek Market Wrap.
We are entering the quiet season for the U.S. grain market, filled with holidays and winter, which usually brings out thin light trading. This will likely exaggerate any news item due to thin volume.
With the late planting in 2022, many thought this may be a bad year for the grain markets. However two grain marketing experts were pleasantly surprised by an average year.
Soaring grain and livestock prices are expected to push U.S. farm incomes to a historic high this year, as producers benefit from strong global grain and oilseed demand amid tight supplies, the U.S. Department of Agriculture reported on Thursday.