Market watches weather and economy as commodities stay in tight trading ranges – Agweek

The market doesn’t want to put too much pressure on commodities, an acknowledgment of continued tight supply and demand, Randy Martinson of Martinson Ag Risk Management said in the Agweek Market Wrap.

“I think this market is just waiting,” he told Don Wick of Red River Farm Network.

The market is watching planting in South America – slow because of dry conditions – as well as waiting to see where the yield numbers end up in the US, Martinson said. He said demand for soybeans has been strong every time soybean prices have fallen, while supply of corn and wheat remains tight and demand has not been a major factor.

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What happens to the dollar is also a factor, particularly on the corn and beef side, Martinson said. Most experts expect interest rates to rise by 0.75% in November and expect a smaller increase in December, he said.

Wick asked how low water on the Mississippi River was impacting demand. Martinson said it is causing more demand for soybeans in the northern plains because supply is tight. And Mississippi’s barge problems aren’t the only transportation problems on the horizon.

“I’m still worried that we might be seeing a rail strike happen,” he said.

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Wick said the base has been decent in the region and wondered what, if any, farmers are selling the combine. Martinson said soybeans are selling the combine, but “farmers are putting as much corn as they can in the trash.”

“Corn is going to have a very big increase in its prices,” he said.

Wick and Martinson also talked about the Black Sea negotiations; Martinson thinks a new deal to allow Ukrainian transport comes down to how aggressive Russian attacks are before the current deal expires.

In cattle, Wick said “packers had to be aggressive to secure supplies” this week because “the numbers just aren’t there.” Martinsson explained that the slaughter of cows from the slaughter because of the drought in the south has been decreasing.

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“You can only slaughter so much,” he said.

While there is a collection of northern calves coming to market, there aren’t enough to maintain supplies.

“We’re going to see a tightening of supply going forward,” Martinsson said.

Going forward, he thinks the weather in the US will be a bigger problem than usual due to dry conditions, particularly in the southern plains, as well as dry Brazil and Argentina.

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


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