Markets stay in a tight range as traders wait on South American crop details
Randy Martinson of Martinson Ag Risk Management and Don Wick of the Red River Farm Network talk about the narrow trading range for corn and soybeans, export news, South American weather, Mississippi River water levels and more on this week's Agweek Market Wrap.
Corn and soybeans have been trading in a narrow range for almost a month, Don Wick said on this week's Agweek Market Wrap.
"What's going to get us out of this sideways pattern?" he asked Randy Martinson of Martinson Ag Risk Management.
Martinson said even new news doesn't change the range much, and it appears the market wants verification of everything. Traders seem to be looking to South American planting for more information.
"I think they're waiting to see just where the acres fall," he said
While soybeans have had export business from China and Mexico, corn is looking for business. Martinson said corn already is missing big buyers and news that Mexico intends to carry through with its intention to stop importing GMO corn in 2024 isn't helping the outlook.
As for South America, dry conditions persist there, though Argentina has picked up some rain this week that will help their already planted and soon to be planted corn and soybeans. Wheat is in tough shape and won't be as helped.
In the U.S., drought continues to hamper movement of grains on the Mississippi River, where historically low levels have affected barge travel. Because of difficulties getting grain through the river system, there's more demand for it to go out on rail to the Pacific Northwest. That, Martinson said, has helped basis levels as end users — particularly for soybeans — have been bidding aggressively. That's a good sign for farmers, given the numerous soybean plants planned and under construction.
"Let's hope that most of those get built," Martinson said.
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Fall pricing for crop insurance will be set on Oct. 31. Martinson said corn is up 16% from February, soybeans are down a little and sunflowers also are higher.
On the cattle side, Wick said packers have had to "pay up" for cash cattle. Martinson said there's been a definite slowdown in cows coming to butcher, which has the packers relying more on feedlots.
"We're only going to see supplies get tighter as we move forward," he said, noting that will be a driving force for the cattle markets.
Martinson thinks the market is expecting a 0.75% interest rate increase from the Federal Reserve in November and already has that factored in. What happens in December will be "set the tone for a bigger impact," he said.
The "winter doldrums" may start setting in soon, as harvest wraps up, Martinson said. Traditionally, wheat and corn start to move in November, so he said that's something to watch for, along with basis levels and demand.
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)