Winter wheat takes the lead, but spring wheat may not be done yet
AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management talk about the reasons winter wheat has taken over as the leader from spring wheat, soybean meal's continuing strength, corn's struggles, beef's good week and pork's tough road.
Winter wheat posted gains this week on spring wheat for the first time in quite awhile, AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discussed on the Agweek Market Wrap.
Part of that, Martinson said, is a simple unwinding; the two classes can't get too far apart on the markets. But there also were fundamental reasons for winter wheat to go ahead, including weather issues in the U.S. and Australia.
But, Rook asked, does that mean the party is over for spring wheat?
"I think once we get passed the Thanksgiving holiday, we get into the first part of December, I think we'll start to see Minneapolis wheat start to move a little bit," Martinson said.
Farmer selling spring wheat is part of it, too, Rook said. But Minneapolis wheat's price needs to stay up to compete for acres, as wheat takes a lot of fertilizer compared to what Martinson called some "minor crops" that might get moved into rotations.
Soybeans had another good week, again propelled by the strength of soybean meal. A lycene deficiency means more meal is needed to get adequate protein into livestock diets, Rook explained. And that's a good thing for soybeans. Plus, Martinson said, dry conditions continue in Argentina, the largest meal producer in the world.
Soybean oil had been taking the lead, but that market has slowed down of late. And for soybeans overall there are other issues, including export demand.
"Part of the trouble is because of the rapid planting in Brazil," Martinson said, noting that progress has brought down the price of Brazilian soybeans. "They're a little more competitive with the U.S. at this point."
Corn had a down week, and Martinson said that while ethanol demand remains strong, exports are only "within expecations." It'll take help from wheat or a weather problem to make a difference, he said. But fertilizer prices remain an issue.
"Where will the acres end up for South America, because they're going to have the same fertilizer issue we are," he said.
Rook said a drop in oil prices also impacted corn this week, too.
Looking forward to next week, Rook and Martinson said holiday weeks always are tricky.
"By next Wednesday, it could be anybody's guess what this market does," Martinson said.
A mixed cattle on feed report shouldn't have much of an impact on cattle markets, Martinson said. Cattle have been strong, with weights down, strong exports and tightening supplies. Exports to China set a record.
"It was huge, I mean, a record amount this last week," Martinson said. "Thhey seem to be going more toward our beef and a little bit away from our pork."
While that's good news for cattle, it's bad news for the struggling pork market. Demand seems to be the problem in the pork market, Martinson said.
But after Thanksgiving, Rook said, demand may turn in favor of beef and pork as we get passed the turkey holiday.
"Demand is the one thing we really do need," Martinson said.