Wheat continues to deal with a lack of demand and uncertainty regarding what Russia will do with wheat exports, explained Randy Martinson of Martinson Ag Risk Management. A higher U.S. dollar for most of the week didn’t help.
But there are some friendly signs for the wheat market, if they come to fruition. One is that Stats Canada released a friendly report, which lowered Canada’s wheat stocks. That’s especially positive for northern states, Martinson said.
Another sign that could help: Temperatures have been cold in many places where winter wheat grows. But since the crop remains in dormancy and will for some time, that won’t help yet, Martinson said.
“It’s kind of early to be putting a weather premium in it,” he said.
To watch previous episodes of the Agweek Market Wrap, click here.
Meanwhile, corn was more steady, even on the heels of the single largest week of U.S. corn sales of 293 million bushels, along with 200 million gallons of ethanol sold to China. Martinson said one reason corn hasn’t continued to increase in price is that there is talk that the number of corn acres will increase this spring to meet demand.
Still, Rook and Martinson think the U.S. Department of Agriculture will eventually have to cut corn stocks due to the high export numbers, which could push corn to new highs. But don’t expect it to all happen at once.
“It might not happen in this report” coming out on Feb. 9, Martinson said.
But the big corn sales show that the price isn’t too high yet.
“Our price is not there to slow down demand,” he said.
Soybeans were down a little for the week. Martinson said the USDA also should reduce soybean stocks in next week’s World Agricultural Supply and Demand Estimates report. But he doubts it’ll get cut much yet. The progress of harvest in South American continues to be the thing to watch.
Cattle and hogs continue to show strength toward summer and early fall, when many people believe demand will increase as the COVID-19 pandemic wears down. Martinson speculated that as more people desire to get out to restaurants, there will be more demand for meat.
“There’s a lot of pent-up demand out there,” he said.
