Soybeans hit six-year contract highs. How much higher do they need to go?
AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discuss the ever-tightening supplies of soybeans, along with the market situation for corn, wheat and cattle.
Soybeans reached six-year contract highs late this week, so AgweekTV's Michelle Rook asked Randy Martinson of Martinson Ag Risk Management how high the price needs to go to ration demand.
"If we can continue to get the news we're getting . . . I think we've got some room to move," he said.
The news includes rumors that China is switching business from Brazil to the U.S. Martinson said at some point, the U.S. Department of Agriculture is going to have to make some changes to ending stocks to account for this increased demand. Otherwise, "We would risk running out," he said.
The last time soybean stocks were as tight as it looks like they could end up, there were "beans in the teens," Martinson said.
The soybean market was helped by bullish soybean meal markets and pretty much the "whole vegetable oil" markets, including soybean oil, canola oil and palm oil, he said.
Corn followed soybeans to an extent, but Martinson expects "sloppy trading" in the week of Christmas.
Wheat did not follow as much but, just like last week, rumors out of Russia seem likely to help the wheat market keep up. Martinson said the new Russian wheat rumors are that the government there is slowing down paperwork on exports to keep wheat in their country, even before their rumored stop to exports comes in February.
Cattle closed higher in part on optimism that comes with vaccinations beginning for COVID-19, While demand "isn't there" now, Martinson said it appears demand will come as things return to a new normal. The cattle on feed report released Friday also was friendly to the markets, though the high corn price puts somewhat of a damper on the feeding situation.
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