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Soybeans near all-time highs as demand for U.S. beans remains hot

AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management talk about high prices in the grains, including a near-historically high soybean price, and about the upcoming Prospective Plantings report.

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The grains closed higher on Friday, with soybeans reaching "some of the highest levels in history," Randy Martinson of Martinson Ag Risk Management said on the Agweek Market Wrap.

Martinson, speaking with AgweekTV's Michelle Rook, said good demand out of China has helped, plus soybeans need to buy or hold acres for the growing season.

China is expected to switch to buying from Brazil by about the beginning of April, Martinson said, but he expects the short supplies due to South American drought will bring China back to the U.S. eventually, which has kept the old crop contracts high. The spread between old crop, which topped $17, and new crop is about $2, they said.

"I think we will see late summer purchases come back into play," he said.

Corn, Rook said, was a consistent performer this week and is trying to buy acres. Strength in both corn and wheat is tied to the Russian invasion of Ukraine. It remains uncertain how many acres Ukraine will get planted, and what does get planted likely will be used in country. Ukraine is a big player in exports of many crops, including corn and wheat.

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However, export sales of the crops out of the U.S. have been disappointing lately, Rook and Martinson said. Martinson said wheat's exports have been "terrible to say the least."

The Prospective Plantings report is due out from USDA on Thursday, March 31. Martinson said soybeans need to be at about 90 million acres to settle the market. He expects corn to be stable with last year's numbers, though there may be an increase in the northern Plains/upper Midwest. Wheat will decrease, he guessed.

Cattle rallied into Friday, when the Cattle on Feed report came out, and Martinson said the report was bearish and indicated a lot of heifers are being placed in feedlots rather than kept for replacement. While that will increase meat supplies into the fall, it is going to impact the cattle herd down the road.

Feed costs from the high grain prices also have an impact on the cattle market, and the stock market's performance does, too. Martinson said Fed Chair Jerome Powell's comments on a likely big hike to interest rates was not a positive for cattle.

Hogs were "sharply higher," Rook said, noting that the funds "have been loving" the hog market. The market has been all about tight supplies. A Hogs and Pigs report is due out next week. Martinson believes the market is nearing a top, while Rook seemed skeptical of that based on tight numbers.

Avian influenza also might influence the livestock markets, as problems in poultry could send consumers to beef or hogs, Rook said.

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