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Markets rebound Friday heading into Labor Day weekend

A big drop off in prices for grains and oilseeds on Thursday was followed by a big turnaround on Friday, and Randy Martinson of Martinson Ag Risk Management told Don Wick of the Red River Farm Network on the Agweek Market Wrap that it appears to have been a combination of profit taking and positioning ahead of the three-day Labor Day weekend.

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A big drop off in prices for grains and oilseeds on Thursday was followed by a big turnaround on Friday, and Randy Martinson of Martinson Ag Risk Management told Don Wick of the Red River Farm Network on the Agweek Market Wrap that it appears to have been a combination of profit taking and positioning ahead of the three-day Labor Day weekend.

The Thursday drop in wheat and corn, he said, might have been overdone, because stocks appear likely to be tight for both commodities. However, soybeans was the star, as demand continues to be hot. Almost 2 million metric tons of sales to China and an uknown destination and have been announced — and there could be more. USDA has announced its reporting site will be down until Sept. 15 after snafus with a new system launched in late August.

Sept. 1 also launched a new marketing year. Martinson said demand due to weather in China and Europe, as well as continuing export struggles in Ukraine, will be part of the new crop story.

Outside markets had some impact on commodities this week. Wick pointed out that crude oil dropped from $97 on Monday to the low $80 range by close on Friday. Additionally, the U.S. dollar has seen some highs. Martinson said the high dollar tends to hurt commodity exports, and that's been the story for wheat. However, China and an unknown destination continue to buy soybeans because they need them regardless of the price.

And, as he noted last week, Martinson said Fed Chairman Jerome Powell's repeated talks of "pain" to come in the economy continues to temper the market.

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"That kind of sent a shiver up the spine of not only the stock market but also the commodities," he said.

Spring wheat harvest continues, and there continues to be a west versus east disparity in yields, with western North Dakota generally seeing more positive results. However, the northern tier crop "has a ways to go yet," Martinson said, and how that plays out could set the tone for North Dakota's production of wheat.

A frost-free September, or at least most of it, could help the wheat as well as other crops. Soybeans, in particular, could see "a pretty good size crop" in some places after some late season rains, Martinson said.

In the meat markets, Memorial Day, Fourth of July and Labor Day are considered the big grilling season, and demand for meat shifts after that, with more focus on government purchases for school lunches and the military, Martinson said. He said there is hope for strong demand for beef and pork. If it weren't for the economy, he believes cattle would be having a lot better performance now than they have been.

Trading will resume Monday night, and Martinson said it seems the markets needed a break and time to regroup. Crop Progress reports won't be out until Tuesday afternoon, so the weather over the weekend might be an early driver next week.

The Agweek Market Wrap is sponsored by Gateway Building Systems.

Jenny Schlecht is the editor of Agweek and Sugarbeet Grower Magazine. 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.
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