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Wheat keeps going higher with no end in sight

AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discuss the continued strength of the Minneapolis wheat market, whether corn and soybeans have hit a harvest low and the ups for cattle and downs for hogs.

Wheat keeps moving higher, and there isn't much end in sight right now, AgweekTV's Michelle Rook and Randy Martinson of Martinson Ag Risk Management discussed on this week's Agweek Market Wrap.

This week's World Agricultural Supply and Demand Estimates report put wheat at 14-year lows for ending stocks. Canada won't have as much wheat to export to the U.S., and other wheat power houses also are struggling with stocks.

High quality wheat, like the hard red spring wheat traded in Minneapolis, is in especially short supply, as judging by Paris milling prices, Martinson said.

"It shows that good quality wheat is tight and in short supply around the world," he said.

Australia is really the only place seeing good production, he said.

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While Martinson said he doesn't see wheat climbing the way it did in 2006, "I do think we're going to see double digit prices in the Minneapolis market."

Minneapolis wheat also are pulling up the other wheat classes, though winter wheat planting struggles also are playing into the price increases.

Wheat also is helping out corn, which saw some slightly bearish numbers in the October WASDE. But Martinson said strong basis numbers continue to show that "supplies aren't there" and that maybe the "projected second largest crop on record" might fall short.

"I think we're not seeing the production as much as projected," he said.

Rook pointed out that it's ethanol plants that are bidding up corn, and with ethanol production up along with gas prices, that's a positive thing for corn.

Corn and soybeans both bounced off lows and saw some positive movement after the WASDE, which Martinson said might indicate the harvest lows are in for both crops. That's unusual because about half of U.S. harvest remains, but good demand for both crops plays into it, he said.

But especially with soybeans, Martinson said it wouldn't be a surprise to see the U.S. Department of Agriculture's November and December reports show even bigger yields than the September report showed.

"Big crops get bigger, and that's what everyone's expecting in soybeans," he said.

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Moving forward, demand from China and the weather in South America will be big keys to the soybean market.

Cattle had a pretty good week, with solid demand, but hogs did not do as well. Martinson said the strength in cattle should help the hogs, but he's not sure where the market goes going forward.

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