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USDA report lifts corn and wheat markets but soybeans struggle

Randy Martinson of Martinson Ag Risk Management and Randy Koenen of Red River Farm Network discussed how the Grain Stocks report from USDA pushed corn and wheat higher but was generally bearish for soybeans on this week's Agweek Market Wrap.

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The U.S. Department of Agriculture released its Grain Stocks report and Small Grains Summary on Sept. 1, and the reports were friendly to corn and wheat while not friendly at all to soybeans, Randy Martinson of Martinson Ag Risk Management and Randy Koenen of Red River Farm Network discussed on this week's Agweek Market Wrap.

The report had old crop corn stocks at 1.38 billion bushels, up 12% from Sept. 1, 2021, and tighter than expected. It had old crop soybeans at 274 million bushels, up 7% from last year and higher than expected. The report revised corn production for 2021 down to 41.4 million bushels, with soybeans revised up to 30.2 million bushels.

Martinson said most analysts expected the report would be friendly to the grains, but the report sent corn and soybeans in opposite directions.

Wheat came in at 1.78 billion bushels, up less than 1% from a year ago, which Martinson said was about as expected and friendly. He said increases in wheat prices may encourage more planting of winter wheat and especially in the southern region where farmers are being encouraged to double crop with soybeans or sorghum.

Wheat continues to be helped by escalation of tensions between Russia and Ukraine. Martinson said the end of the shipping agreement that has allowed Ukraine to export some grains is likely, which especially impacts wheat and corn markets. The tensions aren't likely to decrease as Russian President Vladimir Putin tries to annex four regions of Ukraine into Russia.

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"I don't think that's going to sit well with the Ukrainian people," he said.

Koenen asked about the impact of Hurricane Ian, which has hit Florida and other parts of the southeast. Martinson said the hurricane will have an impact on hog farms in North Carolina, as well as soybeans in that area. That could have helped to support soybeans, he said, but the USDA report numbers "overwhelmed" the market.

Martinson said there could have been some money changing hands and liquidation in the corn and soybean markets, but the real market impact was that report, especially for reinforcing for the corn market the idea that "stocks are not going to be there."

Other things impacting the corn market are things like low water on the Mississippi, which has widened basis levels, Koenen said. That will have a ripple effect later in the season into other regions, Martinson and Koenen said. Labor issues at West Coast ports and on railroads also could impact the movement of grain.

Cattle struggled this week, though the cash trade wasn't too bad, Martinson said. However, the hog market performed well on a friendly Hogs and Pigs report.

"It finally got some good news and traded it," he said.

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

Jenny Schlecht is the director of ag content for Agweek and serves as editor of Agweek, Sugarbeet Grower and BeanGrower. She lives on a farm and ranch near Medina, North Dakota, with her husband and two daughters. You can reach her at jschlecht@agweek.com or 701-595-0425.
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