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Quarterly report and labor disputes influence markets this week

Don Wick of the Red River Farm Network and Randy Martinson of Martinson Ag Risk Management said that the Quarterly Stocks and Planted Acreage report along with a trucker protest in Argentina and ongoing West Coast port labor talks had an impact on markets this week.

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An interesting quarterly report from the USDA resulted in corn and wheat stocks down, according to this week’s Agweek Market Wrap with Don Wick of the Red River Farm Network and Randy Martinson of Martinson Ag Risk Management. 

The big market influence for traders this week was the Quarterly Stocks and Planted Acreage report which USDA released on June 30, in which the number that stood out to both Wick and Martinson was the soybean acreage. Martinson said he didn’t expect to see the U.S. down more than 2 million soybean acres from expectations. 

“That was a little bit deeper cut than I anticipated on the soybean side,” said Martinson. 

However, Martinson said a resurvey coming for Minnesota, North Dakota and South Dakota could mean those numbers will change. He expects that updated numbers will show lower wheat and corn numbers in the three states, and a little bit of an increase in soybean numbers. 

Less acreage reported and good growing conditions means there’s more pressure for a good crop to be put out this year, said Martinson. 

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“It puts that much more pressure on trendline, or better than trendline yields needed to be accomplished this year,” said Martinson. “Especially on the soybean side”

Martinson said it will be an interesting grain stocks report coming July 12 which he believes will show “tremendous” cuts. 

Wick said both corn and wheat stocks had a “pretty ugly” end to the week. Martinson said the funds were “basically bailing out” of their positions. He said some of that had to do with it being ahead of a long weekend, but recession talk and fund liquidation also played a part in the downturn in those stocks. 

“I do think that some of what we saw was also tied to better weather forecasts,” said Martinson. “They're talking about cooler, wetter conditions for the Corn Belt, and I think that is really what the trade is looking at.”

Logistical issues have been brought up in every recent Agweek Market Wrap including this week’s, as a trucker protest in Argentina threatens grain exports and ongoing West Coast port labor talks ahead of late Friday's expiration of the contract covering more than 22,000 workers.

Martinson said those stories have had an influence on markets, as basis levels continue to be strong and a “wide inversion” has been seen in the markets. 

“That tells us that the supplies are tight, and the end users want the product,” he said. “It's just having a tough time getting it in.”

The Agweek Market Wrap is sponsored by Gateway Building Systems.

Noah Fish is a multimedia journalist who creates print, online and TV content for Agweek. He's also the host of the Agweek Podcast.

While covering agriculture he's earned awards for his localized reporting on the 2018 trade war, and breaking news coverage of a fifth-generation dairy farm that was forced to sell its herd when a barn roof collapsed in the winter of 2019. His reporting focuses on the intersection of agriculture, food and culture.

He reports out of Rochester, Minnesota, and can be reached at nfish@agweek.com
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