Next week's USDA report and South America weather expected to influence markets

Randy Koenen of Red River Farm Network and Randy Martinson of Martinson Ag Risk Management discuss what's going on in the agriculture market around the world on the Agweek Market Wrap.

While the market was considered “wishy-washy” this week, a lot will be determined over the next month in U.S. grain markets.

Randy Martinson of Martinson Ag Risk Management talked about this being a “transitional period” during the Agweek Market Wrap on Friday, Feb. 3, with Randy Koenen of the Red River Farm Network.

Top of mind continues to be South American weather and crop insurance values in the U.S. that will soon be set.

“There is still some worry with the Argentina crop. You’ve got the Brazil crop that’s also some concerns, but then you have, you know, we’re setting our crop insurance prices right now, so a lot will be determined in what’s going to happen in the next month, on maybe how acres are going to fall in the U.S.,” Martinson said.

With Argentina having weather trouble and Brazil having better conditions — it’s not clear what will impact the markets more.


More close to home, Koenen pointed out that it appears demand and exports are showing positives in the U.S. Martinson agreed, pointing out that wheat exports will likely show a decrease, but corn has had good sales in the last week.

The World Agricultural Supply Demand report coming out next week is not typically as widely followed as others, but will show some tweaking in demands, according to Martinson. Though, as previous reports have had quite an impact, it’s possible this one will, too.

"Everyone will be watching this one as far as South America's crop numbers being tweaked," Martinson said. He does not expect much adjustment for U.S. soybean or corn, but a possible adjustment for wheat is likely.

Martinson said one surprise of note is that corn and soybean exports are holding steady. It was estimated that some cancellations would come in as the USDA lowered export expectations earlier this year.

“But with the rains and the slower harvests, we’re not seeing that demand switch yet,” Martinson said.

Martinson said the economic impact on markets is fairly positive as the Federal Reserve increased interest rates by just a quarter percent on Feb. 1, and gave the announcement that other increases would be minimal this year in an attempt to bring inflation down. Employment numbers are also showing a strong workforce with an unemployment rate of 3.4%.

Cattle mixed

The impression on the cattle market has been that talk of a recession hurts the demand for beef. But a stronger economic outlook gives hope that the public remains hungry and ready to buy beef.


“It doesn’t look like we’re going to see a slowdown in domestic demand in the short term,” Martinson said.

While beef’s future may be brighter, the hog market continues to take a hit.

“So far there has been no end in sight,” Martinson said for the hog market which took another drop on Friday.

Cash cattle showed increases of about $1 higher. Feedlots have been in poor condition in portions of the country and an improvement to the weather, at least in the northern Plains, could help get cattle to market to fill demands.

Martinson said South American weather, Canadian grain reports and the USDA world agricultural estimates will likely be the big drivers driving the markets in the coming week.

(The Agweek Market Wrap is sponsored by Gateway Building Systems.)

Michael Johnson is the news editor for Agweek. He lives in the city of Verndale, Minn., but is bent on making it as country as he can until he returns once more to the farm living he enjoys. Also living the dream are his two children and wife.
You can reach Michael at or 218-640-2312.
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