Russia's back and forth on Black Sea deal spurs 'wild week' in the market
Randy Martinson of Martinson Ag Risk Management and Don Wick of Red River Farm Network discussed Russia's back-and-forth on the Black Sea grain shipping pact, weather, interest rates, supply and demand and more on the Agweek Market Wrap.
Russia's back-and-forth on a Black Sea shipping deal spurred a "wild week" in the markets, Don Wick of the Red River Farm Network said on this week's Agweek Market Wrap.
Randy Martinson of Martinson Ag Risk Management said Russia's announcement that it would pull out of the deal that allowed Ukraine to ship grain out of the Black Sea sent grain markets up to the high end of the trading ranges.
"But then it kind of abruptly came to an end," when Russian President Vladimir Putin announced his country was back in the pact, he explained.
Martinson said farmers have opportunities given the market fluctuations.
"Producers should be pricing basis. Levels are good, you know," he said. And with most of the crop out of the field, when the market reaches those high levels, "maybe put some puts underneath this market to protect yourself on the downside if you're not ready to quite sell the cash yet," he suggested.
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- Ukraine grain exports down 30.8% at 15.6 million metric tons so far in 2022-23
- USDA surprises with yield adjustments and lack of demand adjustments in November reports
- The search for market direction continues
With Brazil's presidential election over, attention in South America turns to the status of the crop, Martinson said. That's "starting to become a little more of a concern," he said, with dry conditions continuing to plague Brazil and Argentina, with Argentina taking the bigger hit.
"At this point I would think that it's going to be pretty tough for South America to reach that 200 million metric ton production estimate that they were talking about earlier in the year for soybeans, especially with the drought conditions in Argentina," he said.
Other things that could impact the markets include the upcoming midterm elections, what the Federal Reserve does on interest rates in December and the November WASDE.
Martinson said demand slows this time of year for beef and pork, and interest rates could also hurt the cattle market, plus export demand could be hurt by the stronger dollar. And slaughter weights are increasing a little bit. However, he said supplies are going to continue to tighten up.
(The Agweek Market Wrap is sponsored by Gateway Building Systems.)