The USDA’s May 2023 Crop Supply and Demand report was friendly to wheat but less so to other grains. A week after the report was released, the sting is still being felt across the market, according to Randy Martinson of Martinson Ag Risk Management.
He shared his thoughts Friday, May 19, with Randy Koenen of the Red River Farm Network on the Agweek Market Wrap.
Martinson said wheat, corn and soybeans have taken a hit this week.
“We’re about a month ahead of ourselves as far as the market is concerned,” Martinson said. “We’ve taken all of our risk premium out of it for planting concern and growing concerns and we’re back down to the lows, especially when you look at it for corn and soybeans.”
Koenen noted some gains in the corn market earlier in the week, but it was all lost.
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“We’re extremely oversold,” Martinson explained. “The market needs to see a little correction.”
Martinson noted that a long term weather forecast shows there’s a chance of rain over a 10-day period.
“Which means we’re not going to get all the corn planted, we’re not going to get all the spring wheat planted and it’s going to be touch-and-go to get the soybeans planted,” Martinson said.
If this forecast holds it could lead to some prevented planting. Martinson said there’s not likely to be as much of the prevented planting as first thought or as last year. Some areas are progressing along and even ahead of last year's planting .
Koenen wondered if the awful smoke that’s hit the northern Plains from Canada wildfires is having any impact on farming. Martinson said it does, because the sun’s full power can’t be used to dry out some fields for those planting in wet conditions.
“There is some extra tillage going on because we’re not seeing the full effects of the sun,” Martinson said.
Drought remaining in the U.S. does not seem to have much effect on the markets right now.
“That’s an area that is expected to get some rain here in the next 10 days, so that’s why the market is kind of ignoring it,” Martinson said.
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The economy continues to have its pull on the market. Rumors have returned that the Federal Reserve might once again raise interest rates in June.
Koenen brought up China defending their currency.
“It’s a world market, right now, we’ve got to watch more of what's going on over there then what’s just going on in our backyard,” Martinson said.
Koenen said any weather scare could really change the markets.
Any kind of surprise in the market could cause a big stir and a big push, Martinson said in agreement.
Overall, Martinson said this market will keep its eyes on planting progress and weather in the U.S.
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)
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